Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/245524 
Year of Publication: 
2021
Series/Report no.: 
Deutsche Bundesbank Discussion Paper No. 35/2021
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
The Eurosystem's Public Sector Purchase Programme (PSPP) increased the scarcity of safe assets, which caused significant declines and substantial dispersion in European repo rates. However, banks holding these safe assets benefited from this development: First, using the German security register, this paper shows that scarcity affects bank funding costs, as their collateral supply is determined by their ex ante securities holdings and repo rates. Second, it makes use of the German credit register to show that asset scarcity had real effects: Banks more exposed to asset scarcity increased their credit supply.
Subjects: 
Quantitative easing
safe asset scarcity
repo rates
bank lending
monetary transmission
JEL: 
E51
E58
G11
G21
ISBN: 
978-3-95729-843-0
Document Type: 
Working Paper

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