Covered bonds brace for increased ECB buying

ECB adobe stock AS 230x150
By Bill Thornhill
26 Nov 2019

The European Central Bank has been increasing its proportion of covered bonds relative to other assets bought through its asset purchase programme (APP). Bank research analysts expect that the ECB’s presence will be even more keenly felt in 2020, with covered bond redemption volumes set for a steep increase and with the central bank free to buy at levels below the discount rate.

Weekly data published by the ECB suggests that the share of APP assets bought under the Public Sector Purchase Programme has been reduced, while the proportion of private sector purchases, such as corporate and covered bonds, has increased.

The ECB began buying net €20bn net in assets ...

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