1 The ideas of how asset purchases can contribute to monetary policy becoming more expansionary are not new,  see for instance Tobin (1958). 2 See Bernanke (2020), Di Casola (2022) and Bhattarai and Neely (2022) for summaries of both theoretical and empirical studies. 2 [30]  Figure 1. The Riksbank’s monetary policy securities holdings Nominal amounts, SEK billion  Note. Phase 1 refers to decisions during 2015 to 2019 to purchase government bonds from 2015 to 2020. Phase 2a refers to decisions during March to June 2020 to purchase securities up to mid-2021. Phase 2b refers to decisions from November 2020 to June 2022 to purchase securities during 2021 and 2022. Source: The Riksbank. The effects of the Riksbank's asset purchases Phase 1: 2015-2019 – purchases of government bonds to bring inflation up to the target Despite the Riksbank having cut the policy rate to zero in autumn 2014, it was clear at the start of 2015 that inflationary pressures were problematically weak, and there were also signs that confidence in the inflation target had weakened. To bring inflation up to the target and reinforce confidence in the inflation target, monetary policy needed to be made even more expansionary. In February 2015, the Executive Board therefore decided to cut the policy rate to −0.10 per cent and as a supplement to this to buy government bonds for SEK 10 billion.
However, Figure 4 shows that the difference between these rates and the Riksbank's policy rate does not appear to have been affected by the asset purchases.14 Government bond purchases thus appear to have pushed down the interest rate on government bonds to a certain limit. However, there are no signs that this caused households and companies to encounter lower interest rates. It is therefore very unclear whether the result was that the economy was stimulated via the interest rate channel.15  13 The market is dominated by so-called FRN-bonds, where the coupon follows STIBOR 3 months. 14 Erikson and Vestin (2021) show a similar figure. Some larger companies also finance themselves through the  bond market. However, when the Riksbank began purchasing government bonds, this form of financing was fairly unusual and accounted for only 22 per cent of the companies' total borrowing (see the Riksbank, 2014). Moreover, it is common for companies' bond loans to have variable interest rates. As turnover in the market is small, it is difficult to follow price developments. Nevertheless, the statistics indicate that rates on corporate bonds fell less than those on government bonds in 2015 and 2016. 15 However, the lower interest rates could reasonably contribute to a lower central government borrowing cost, something I will return to in a moment. However, this was not the purpose of the Riksbank's purchases. 7 [30]  Figure 4. Lending rates have followed the policy rate Per cent  Note.