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Global Corporate Bond Issuance
Report

Global Corporate Bond Issuance

What Role for US Quantitative Easing?

ECB, 2014

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Editorial Rating

8

Qualities

  • Innovative

Recommendation

What was once heresy is today banality: Now that nearly every central bank either has undertaken or is pursuing quantitative easing (QE), it is probably time to retire the phrase “unconventional monetary policy” to describe it. Marco Lo Duca, Giulio Nicoletti and Ariadna Vidal Martinez, economists at the European Central Bank, show how the brainstorms and experiments of academics and central bankers affect the real world, particularly in the aftermath of the 2008 financial crisis. getAbstract recommends this informative analysis of the Federal Reserve’s QE policies and their effects on corporate bond issuance around the world.

Summary

Global corporate bond issuance has increased substantially since central banks’ adoption of quantitative easing (QE) policies. In developed economies, issuance is well above historical norms, and it has reached unparalleled highs in developing economies. Many reasons could explain this surge, but its broad global distribution speaks against country- or region-specific causes. Instead, the swell suggests that interventions such as the US Federal Reserve’s large-scale asset purchase program (LSAP) drive issuance. The Fed’s purchases of Treasury bonds and mortgage-backed securities/government...

About the Authors

Marco Lo Duca, Giulio Nicoletti and Ariadna Vidal Martinez are European Central Bank economists.