study the intended and unintended consequences of asset purchases in the repo market with Bund collateral. Bunds that are …

We utilize the Eurosystem securities lending facilities as a laboratory to investigate the impact of collateral … overall activity in the repo market expands through the collateral multiplier. The improved pricing conditions alleviate … collateral scarcity and enhance market quality in both the repo and cash markets. …

firm level? We exploit that, in 2007, the European Central Bank replaced national collateral frameworks by a single list …. This collateral framework shock added loans to non-domestic euro area firms to the pool of eligible assets. Using loan … extended to (previously eligible) domestic borrowers, suggesting only a limited cross-border effect of the collateral framework …

their collateral supply is determined by their ex ante securities holdings and repo rates. Second, it makes use of the …

The reuse of collateral can support the efficient allocation of assets in the financial system. Exploiting a novel … dataset, we quantify banks’ collateral reuse at the security level. We show that banks substantially increase their reuse of … collateral in response to scarcity induced by central bank asset purchases. Repo rates are less sensitive to purchase …