The operation of the portfolio balance channel has been emphasized by monetary policy makers as a key channel through which quantitative easing (QE) policies work. We assess whether the investment behavior of insurance companies and pension funds in the United Kingdom during the global financial crisis was consistent with such an effect by analyzing both sectoral and institution-level data. Our results suggest QE led to institutional investors shifting their portfolios away from government bonds towards corporate bonds, but did not lead to a shift into equities.
|Number of pages||22|
|Journal||Journal of Money, Credit and Banking|
|Early online date||14 Aug 2017|
|Publication status||Published - 14 Aug 2017|