Investors will also have to look for substitutes for government bonds they sell to the Eurosystem. Rebalancing investment portfolios is reflected in corporate bond yields and equities. A decline in yield of corporate bonds reduces funding costs and encourages investments. A rise in securities prices increases the wealth of securities holders and thus consumption.
Patrick Honohan: Economic stability issues Opening statement by Mr Patrick Honohan, Governor of the Central Bank of Ireland, to the Joint Committee on Economic Regulatory Affairs, Dublin, 10 November 2010. *  *  *  Thanks for inviting me to discuss issues of economic stability with you here today.