We have observed a sharp increase in corporate bond issuance following the ECB’s announcement in March this year, but it is too early to see the effects on investment by non-financial corporations.









With the ECB’s purchases of corporate bonds, which started on the 8th of June, the ECB’s interventions in bond markets have become much more targeted. The Corporate Sector Purchase Programme (CSPP) involves outright purchases of investment grade euro-denominated bonds issued by non-bank corporations in the euro-area.

CSPP is carried out by six central banks – Belgium, Germany, Spain, France, Italy and Finland. Purchases are conducted both in primary and secondary markets.

There is some evidence that corporates have sought to take advantage of the ECB decision by issuing a greater amount of securities, following the announcement in March this year.

It is too early to judge whether the ECB action is proving effective. It may be useful to bypass the banks, but it is not sufficient. For this measure to be successful, the corporate sector needs to funnel the money borrowed to the real economy. If the money borrowed from the ECB is used to make progress with deleveraging, then the economy will not benefit in the short run (although there will eventually be benefits, by having healthier corporations). The ECB’s rationale is to take on the risk that banks are currently unable or unwilling to take.