Corporate Sector Purchase Program

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As Corporate Sector Purchase Program ( CSPP ;. Dt program to purchase securities of the corporate sector ) designating European Central Bank (ECB) an applied from their instrument under which the euro system purchases of corporate bonds of the euro area performs. The program was announced in March 2016 and started on June 8, 2016. Critics fear that the program will endanger the economic order in the EU. Since the announcement of the CSPP, bond issues by European companies have reached record levels.

development and implementation

ECB President Mario Draghi announced on July 26, 2012 that the ECB would “do everything necessary within its mandate to preserve the euro”. This was widely interpreted as an indication of a resumption of government bond purchases.

The CSPP completed within the extended program for the purchase of assets (expanded asset purchase programs, EAPP) previously adopted by the ECB EAPP programs: The program covered the purchase of bonds , the purchase of asset-backed securities (ABSPP) and the purchase of government bonds (PSPP). EAPP is independent of the Outright Monetary Transactions Program (OMT) that has also been adopted. While OMTs are intended to work towards improved monetary policy stability in individual countries affected by acute problems, the expanded purchase program aims to counteract deflation through continuous purchases of euro securities . In particular, from the ECB's point of view, the program brings about additional monetary policy easing, and it will "contribute to a return to inflation rates of below but close to 2% in the medium term."

The Corporate Sector Purchase Program is carried out by six national central banks: the Deutsche Bundesbank , the Banque de France , the Banca d'Italia and the Bank of Spain buy bonds from their respective home countries, while the Belgian National Bank and Suomen Pankki make purchases for the other euro countries take over. Bonds from the Netherlands are a special case because many foreign finance subsidiaries are based there (for example those of the Schaeffler Group ). If the company is headquartered in Germany, Spain or Italy, the national central banks also buy the Dutch bonds; otherwise the Belgian National Bank is responsible.

In June 2019, the ECB had around 177.8 billion euros in bonds from the CSPP.

In April 2020, ECB securities purchased as part of the CSPP had to have a default risk rating of BBB- or better. However, it cannot be ruled out that the criteria will be changed in the future.

From April 2020, the Pandemic Emergency Purchase Program (PEPP) was introduced in addition to the CSPP to combat the consequences of the COVID-19 pandemic .

Criticism of the Corporate Sector Purchase Program

Before the start of the program, Jens Weidmann , President of the Deutsche Bundesbank and well-known critic of the expansionary monetary policy of the ECB, pointed out: “This program raises difficult questions of demarcation, and it intervenes more deeply in the financing structures of the economy than with conventional monetary policy . "

The “chief economist” of a US analyst firm saw the risk that parties involved in the purchases could derive economic advantages through insider trading .

The world feared an advantage for French companies and a disadvantage for Italian companies, as the latter borrowed little through the capital market, while a third of all stocks available for ECB purchases were of French origin.

A bond expert at Commerzbank feared that with the purchase program the ECB would reduce an already low level of liquidity in the market for corporate bonds and crowd out private investors. Commerzbank's business is suffering from the low interest rates caused by the ECB's bond purchases.

According to the NZZ , small and medium-sized companies would be disadvantaged by the purchase program, since the program primarily favors large corporations with direct access to the capital market.

Some managers of large corporations whose bonds the ECB can buy have been critical. The CEO of the DAX company E.ON , Johannes Teyssen , considered the purchase program to be superfluous.

See also

Web links

References and comments

  1. ↑ Corporate Sector Purchase Program (CSPP). Deutsche Bundesbank , accessed on August 24, 2016 ( Glossary ).
  2. ↑ a b ECB expands the asset purchase program (APP) to include a corporate sector purchase program (CSPP) and announces changes to the APP. (PDF; 49 KB) European Central Bank , March 10, 2016, accessed on August 24, 2016 (press release, translated by the Deutsche Bundesbank ).
  3. ↑ Nicolai Kwasniewski: ECB program for corporate bonds: Draghi's billion dollar injection for the mighty. European Central Bank starts buying corporate bonds. In: Spiegel Online . June 8, 2016. Retrieved August 23, 2016 .
  4. ↑ a b c d Anja Ettel, Holger Zschäpitz: Now the ECB is putting Europe's economic order at risk . In: The world. June 2, 2016, accessed June 2, 2016
  5. ↑ Orcun Kaya, Johannes Petry: ECB purchase program for corporate bonds: Further distortions. DB Research , June 23, 2016, accessed on August 24, 2016 .
  6. ↑ Cf. for example Matthias Benz: The ECB President indicates intervention. In: Neue Zürcher Zeitung. No. 173, July 27, 2012, p. 1.
  7. ↑ More details on the Eurosystem's corporate sector purchase program (CSPP) - Questions & Answers , ECB.
  8. ^ "Europe's corporate bond market soars on ECB re-entry bets" reuters.com of June 21, 2019
  9. ↑ Tasos Vossos: "Junk Bonds Stay Out of ECB QE Scope After Collateral Rule Change" bloomberg.com of April 23, 2020
  10. ^ "Pandemic emergency purchase program (PEPP) Questions & Answers" ECB of April 2, 2020
  11. ↑ a b Anja Ettel, Holger Zschäpitz: Fateful Day for Europe. In: The world . May 19, 2016. Retrieved August 26, 2016 .
  12. ↑ Michael Rasch: Side effects of buying corporate bonds: The ECB is crowding out private investors. In: Neue Zürcher Zeitung . July 19, 2016. Retrieved August 27, 2016 .
  13. ↑ Interim report as of June 30, 2016 ( Memento of the original from August 27, 2016 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. of Commerzbank AG.  @1@ 2Template: Webachiv / IABot / www.commerzbank.de
  14. ↑ Michael Rasch: Corporate bonds: the ECB buys negatively yielding bonds on a large scale. In: Neue Zürcher Zeitung . August 4, 2016. Retrieved August 23, 2016 .
  15. ↑ Eligible assets: Download area. European Central Bank , accessed on August 26, 2016 (list of bonds that the ECB is buying updated daily).
  16. ↑ Eon boss criticizes ECB monetary policy: 'Nobody needs it'. In: wallstreet: online . August 10, 2016. Retrieved August 26, 2016 .