Non-banks have absorbed the vast majority of the new debt securities issued by non-financial corporates in the euro area this year – notably also from sectors more sensitive to the economic fallout from the pandemic. At the same time, non-banks also played a more negative role in amplifying the market turmoil this spring.
Investment funds, including money market funds, experienced outflows of a magnitude last seen during the global financial crisis. This only stopped once the ECB launched its pandemic emergency purchase programme (PEPP). The PEPP indeed proved to be a turning point in financial markets.