Quantitative Easing Q&A

Who sold their bonds to the ECB?

Mainly non-resident investors, although there are national differences, as this graph by Marcello Minenna shows:

What did companies do with the money from the ECB?

Corporates used the attracted funds mostly to increase dividends, according to research by Karamfil Todorov.

Did QE ease financial conditions?

Yes. Karamfil Todorov found that the ECB’s Corporate Sector Purchase Programme (CSPP) “increased prices and liquidity of bonds eligible to be purchased substantially”1.

Can we trust central bank research on the effect of QE?

Central bank researchers face strong incentives to be positive on QE. Brian Fabo, Martina Jančoková, Elisabeth Kempf and Ľuboš Pástor found that “central bank papers report larger effects of QE on output and inflation. Central bankers are also more likely to report significant effects of QE on output and to use more positive language in the abstract. Central bankers who report larger QE effects on output experience more favorable career outcomes.”

Green finance

Asset managers, bankers, central bankers… Everybody in finance is talking about climate change and sustainability.


But what do green investments mean in practice?

A report by Common Wealth found that some climate-themed funds invest in oil & gas companies such as ExxonMobil. More broadly, the largest holdings of climate funds were Big Tech and finance. Adrienne Buller, the author of the study, writes “what do these ostensibly climate-focused funds really contribute to combatting the climate crisis, reducing emissions or driving a rapid transition to low carbon economic activities? There is nothing in the specific labelling or remit of these funds that would require them to invest in the green economy, in financial instruments design to drive the transition of business models to lower carbon activities, or other similar investments.” (emphasis mine)

Source: Common Wealth

There are plenty of metrics by which providers assess climate risk. Given different methodologies and the complexity of estimating climate risk, there is some divergence in the metrics. However, Chiara Colesanti Senni and Julia Anna Bingler do find that “metrics tend to converge for companies that are most and least exposed to climate risk”.

Data and tools for monitoring climate change and financial assets:

Organizations focused on green finance:

Small country, big financial center

Some countries and cities are crucial for international finance, despite their modest GDP and population size. Here are some European examples:

  • Geneva (with Zug and Lugano) handles up to 60% of the international trade in certain commodities (cereals, cocoa, coffee, sugar, metals, oil, cotton)1.
  • Luxembourg is the domicile of collective investment funds which combined hold assets worth more than 5 trillion dollars. Luxembourg is also a banking center.
  • Ireland is the global leader in aviation finance. It is also an international fund center, albeit smaller than Luxembourg.


During my research, I found a nice mathematical formula for the number of banks in a city. Details will follow later. How well the empirical data points fit the formula can be described with a statistical metric called “R-squared”. Here are some good explainers:

Finance lobby in Europe

Financial centers

Financial industry


Chinese-owned banks in Europe

Bank of China and ICBC are obviously Chinese banks. Less well-known, the following banks are also controlled by Chinese shareholders:

ATLANTICO Europa (Portugal) is owned by “a Hong Kong financial group

Banque Internationale à Luxembourg (Luxembourg) is owned by Legend Holdings (Hong Kong)

Bison Bank (Portugal) is owned by Bison Capital Holding (Hong Kong)

Haitong (Portugal) is owned by Haitong Securities (Shanghai)

Nagelmackers (Belgium) is owned by Anbang, which is owned by the Chinese Ministry of Finance (Beijing)

Saxo Bank (Denmark) is owned by Zhejiang Geely Holding Group (Hangzhou)