Viability of debt issuance could be hit as QE ends – Bank of Canada paper

Bank of Canada facade

The end of quantitative easing (QE) could have an important impact on the viability of government debt issuance, a new working paper from the Bank of Canada warns.

In Following the Money: Evidence for the Portfolio Balance Channel of Quantitative Easing, Itay Goldstein, Jonathan Witmer and Jing Yang study the portfolio balance effects of QE in the US by “following the money” – examining the quantity of individual securities held by mutual funds.

The paper finds that, contrary to conventional

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