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QUALITATIVE EASING AND RISK TRANSFER FROM CORPORATIONS TO CENTRAL BANKS
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Roberto Moro Visconti 
, Maria Cristina Quirici
Abstract
When economies face deflation and de-growth, Central Banks can only activate unconventional monetary policies. Quantitative easing inflates the Central Bank balance sheet, printing money and adding liquidity to the system while qualitative easing modifies the asset composition. With qualitative easing, Central Banks absorb the risk, flattening the yield curve. Consequences for banks and corporate borrowers may be substantial. Both measures increase inflation and reduce borrowing risk premiums, with an impact on company’s balance sheet, widening economic and financial margins and decreasing the real value of debt. Corporate governance implications concern credit risk pooling, as well as (de)leverage, asset substitution and duration risk. This paper provides unprecedented analysis of the impact of ECB unconventional monetary policy on Euro-zone governance equilibriums.
Keywords: Unconventional Monetary Policy, Inflation, Yield Curve, Default Risk, Asset Substitution, Leverage, Stakeholders
How to cite this paper: Moro Visconti, R., & Quirici, M. C. (2015). Qualitative easing and risk transfer from corporations to central banks. Corporate Ownership & Control, 12(3-1), 201-210. https://doi.org/10.22495/cocv12i3c1p8
