Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/128282
Authors: 
Blaszkiewicz-Schwartzman, Monika
Year of Publication: 
2015
Series/Report no.: 
CASE Network Studies & Analyses 478
Abstract: 
The design of the euro area Quantitative Easing (QE) programme raises the question of whether insuficient liquidity in the bond markets will reduce the impact of the programme and lead to market volatility. While estimates suggests that scarcity of around €102 billion may arise over the life of the programme, to date the QE programme has met its monthly targets and bond market volatility has been managed. Questions also arise in respect of the fact that risk is not fully shared on up to €738.4 billion to be purchased over the life of the programme. Partial risk sharing raises the spectre of defaulting central banks exiting the euro system, and existing members being unwilling to bear associated costs, and thus the future of the euro area. However, estimations suggest that, at present, all national central banks should be able to bare losses stemming from sovereign debt purchases under the current round of QE.
Subjects: 
European Central Bank
Unconventional Monetary Policy
Sovereign Debt
Risk Sharing
JEL: 
E58
G1
G15
ISBN: 
978-83-7178-627-3
Document Type: 
Research Report

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