Institutional Investors and the QE Portfolio Balance Channel

Michael A.S. Joyce; Zhuoshi Liu; Ian Tonks

doi:10.1111/jmcb.12415

Institutional Investors and the QE Portfolio Balance Channel

Michael A.S. Joyce, Zhuoshi Liu, Ian Tonks

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Abstract

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.

Original language	English
Pages (from-to)	1225-1246
Number of pages	22
Journal	Journal of Money, Credit and Banking
Volume	49
Issue number	6
Early online date	14 Aug 2017
DOIs	https://doi.org/10.1111/jmcb.12415
Publication status	Published - 14 Aug 2017

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JMCB_15-201_JLT_December2016_FINAL.PDF
This is the peer reviewed version of the following article: JOYCE, M. A.S., LIU, Z. and TONKS, I. (2017), Institutional Investors and the QE Portfolio Balance Channel. Journal of Money, Credit and Banking, 49: 1225–1246, which has been published in final form at https://doi.org/10.1111/jmcb.12415. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.
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Institutional Investors and the QE Portfolio Balance Channel

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