Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154082
Authors: 
Lo Duca, Marco
Nicoletti, Giulio
Vidal Martinez, Ariadna
Year of Publication: 
2014
Series/Report no.: 
ECB Working Paper 1649
Abstract: 
The paper investigates the impact of US quantitative easing (QE) on global non-financial corporate bond issuance. It distinguishes between two QE instruments, MBS/GSE debt and Treasury bonds, and disentangles between two channels of transmission of QE to global bond markets, namely flow effects (purchases) and stock effects (holdings). We control for a number of domestic and global macro-financial factors. In particular, we control for weaknesses in crossborder and domestic banking which might have induced the corporate sector to issue more bonds. The results indicate that US QE had a large impact on corporate bond issuance, especially in emerging markets, and that flow effects (i.e. portfolio rebalancing) were the main transmission channel of QE. A counterfactual analysis shows that bond issuance in emerging markets since 2009 would have been halved without QE.
Subjects: 
bond issuance
crisis management
emerging markets
Federal Reserve
monetary policy
Quantitative Easing
spill-overs
United States
JEL: 
E52
E58
F42
G15
Document Type: 
Working Paper

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