Seminar

CANCELLED BECAUSE OF CORONAVIRUS - Seminar: Corporates' dependence on banks: the role of ECB corporate sector purchases

On Tuesday March 24th 2020, Joost Bats (DNB) will give a presentation titled: "Corporates' dependence on banks: the role of ECB corporate sector purchases"

Date
March 24, 2020
Time
13:00 - 14:00
Location
CPB-office, Bezuidenhoutseweg 30, The Hague (Room 3 - Braamzaal)
Presentation
Joost Bats (DNB)
Discussant
Beau Soederhuizen (CPB)
Working language
English

This paper investigates whether ECB corporate sector purchases impact the funding structure of non-financial corporates. Regression models are estimated using a unique microdata panel, combining data on all Eurosystem corporate sector purchases and individual balance sheets of 672 non-financial corporations headquartered in the euro area with access to capital markets. The findings indicate that ECB purchases of corporate bonds reduce the dependence on bank financing of corporates whose debt is purchased. The effects vary according to corporates’ interest paid, financial expenses and price-to-book ratio. In addition, this paper shows that the relationship between central bank purchases and corporates’ dependence on bank financing is non-linear. The downward effect on bank dependence is largest for those corporates of which most debt is purchased under the CSPP, relative to their total stock of debt.

Contacts

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