Funding Behaviour of Debt Management Offices and the ECB's Public Sector Purchase Programme

This paper investigates whether the funding behaviour of euro area debt management offices (DMOs) changed with start ECB’s Public Sector Purchase Programme (PSPP). Our results show that (i) lower yield levels and (ii) PSPP purchases supported higher maturities at issuance. The former indicates a “locking in low rates for longer”, while latter suggests existence an additional “demand effect” on DMO strategies beyond PSPP’s effect via yields. combined impact these channels amounts to maturity extensions issuance about one year our estimation, which compares average Germany, France, Italy Spain before four years. finding DMOs extend when conditions ease invites further work economic implications public during its relevance monetary policy transmission. JEL Classification: E52, E58, E63, H63