The Bank of France’s Prudential Supervision and Resolution Authority (ACPR) published a research seminar write-up covering a presentation by Ciaran Rogers (HEC Paris) on how quantitative easing (QE) can affect bond-market structure by altering household saving allocation, not only interest-rate levels. Using a dataset combining European Insurance and Occupational Pensions Authority (EIOPA) supervisory data with sectoral financial accounts, the analysis argues that sustained compression of term premia and lower long-term rates reduced the attractiveness of traditional guaranteed-return life insurance contracts. Household reallocations away from these products are estimated to have lowered inflows to life insurers, which are important buyers of longer-maturity bonds, with the authors estimating that EUR 1 of net life-insurance inflows translates on average into around EUR 0.70 of bond purchases. The write-up links this channel to a shift in the investor base financing medium-to-long-term bond debt, including public debt, noting that insurers’ share of euro area government bond holdings fell from 18.6% to 11.8% between 2015 and 2024, and suggests this could complicate monetary policy normalisation as central bank purchases and holdings decline. The next ACPR research seminar is scheduled for 27 May 2026, when Marianne Verdier (Paris-Panthéon-Assas University) will present “Regulation of Selection Technologies” (co-authored with Marie Obidzinski).
Bank of France 2026-04-16
Bank of France ACPR research seminar presents findings on quantitative easing reshaping life-insurer flows and long-term bond demand
The Bank of France’s Prudential Supervision and Resolution Authority published a research seminar write-up on how quantitative easing can affect bond-market structure by changing household saving allocation. Using European Insurance and Occupational Pensions Authority supervisory data and sectoral financial accounts, the analysis links reduced inflows into guaranteed-return life insurance to lower bond purchases by insurers and a decline in their share of euro area government bond holdings from 18.6% to 11.8% between 2015 and 2024, suggesting complications for monetary policy normalisation as central bank holdings fall.