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Flexible asset purchases and repo market functioning

Author

Listed:
  • Grasso, Adriana
  • Poinelli, Andrea

Abstract

Flexibility has progressively become a distinctive feature of the implementation of the Eurosystem’s asset purchases. In its many manifestations, flexibility has also been used by asset managers in the daily selection of sovereign bonds to limit the impact of asset purchases on repo market specialness. This study shows that, since the inception of the Public Sector Purchase Programme, flexible purchases of bonds greatly mitigated the Eurosystem’s footprint on the repo market. JEL Classification: E50, E52, E58, G10, G18

Suggested Citation

  • Grasso, Adriana & Poinelli, Andrea, 2025. "Flexible asset purchases and repo market functioning," Working Paper Series 3013, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20253013
    as

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    File URL: https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3013~4e62b9739e.en.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    asset purchases; flexibility; market neutrality; repo; specialness;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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