The impact of the corporate sector purchase programme on corporate bond markets and the financing of euro area non-financial corporations

Abstract

the impact of the corporate sector purchase programme on corporate bond markets and the financing of euro area non-financial corporations prepared by roberto a. de santis, andré geis, aiste juskaite and lia vaz cruz this article reviews the impact of the ecb’s corporate sector purchase programme (cspp) on corporate bond markets and the financing of euro area non-financial corporations (nfcs). it finds that the cspp has led to a significant easing in financing conditions for euro area nfcs, including declines in corporate bond spreads, improved supply conditions in the corporate bond primary market and increased bank lending to nfcs that do not have access to bond-based financing. the operational set-up of the cspp, in particular its flexibility and adaptability, minimises any impact that could be detrimental to the functioning of the corporate bond market. introduction the cspp forms part of the ecb’s asset purchase programme (app). its purpose is to ease financing conditions in the real economy. in broad terms, the cspp consists of purchases by the eurosystem of investment-grade euro-denominated bonds issued by non-bank corporations (i.e. nfcs and insurance corporations) established in the euro area. the cspp helps businesses across the euro area to gain better access to credit, boost investment, create jobs and thereby support overall economic growth. this is a precondition for inflation to return to, and stabilise at, levels below, but close to, 2% over the medium term. …

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