Event Details

Economics Seminar

Abstract: How do the effects of central banks’ corporate bond sales differ from those of purchases? Using new micro-level data, this paper provides fresh evidence on the effects of the Bank of England’s Corporate Bond Purchase Scheme (CBPS) and its subsequent unwind. Employing a cumulative difference-in-differences framework, we uncover strong asymmetry: purchases can significantly increase sterling bond issuance, shifting funding toward debt, and boosting firms’ growth, investment, employment, and profitability—especially for firms reliant on domestic bond markets. By contrast, corporate bond sales have minimal effects. Credit easing therefore transmits far more powerfully than tightening, particularly for domestic firms.