In the absence of a well developed corporate debt market, the demand for debt instruments has largely concentrated on government securities with the attendant implications for the yield curve and, in turn, for monetary transmission. The secondary market for corporate debt has suffered from lack of market making resulting in poor liquidity.
The design of our Economic and Monetary Union remains a compromise between limited risk-sharing and a large degree of national liability and control. This confronts the ECB with more institutional restrictions than other central banks. It has to deal with 19 different fiscal counterparts, for instance, all of which face different sovereign risk premia.