This paper investigates issuance and possible design of sustainable bank debt instruments. While these types of securities have found their place in corporate industry, banks’ decision to issue debt linked to ESG targets needs to be weighed against regulatory requirements on loss absorbing...

Using French firms’ balance sheet data, we show that corporate debt structure plays a significant role in ECB monetary policy transmission. In addition to interest rate policy, we analyse the impact of a novel ECB-induced bond liquidity shock. While both types of policy tightening diminish...