The Impacts of QE Policies on Corporate Disclosure

A recent study conducted by Roberto Vincenzi, Assistant Professor at Bocconi’s Department of Accounting, sheds new light on the indirect effects of Quantitative Easing (QE) policies on companies' voluntary disclosure practices. The study, titled “Voluntary Disclosures and Monetary Policy: Evidence from Quantitative Easing,” analyzes how central banks' actions affect the disclosure transparency of the companies involved.

According to Vincenzi, “QE policies, although primarily driven by macroeconomic considerations and aimed at stabilizing financial markets, can have significant and less intuitive impacts at company level, particularly on the quantity and quality of corporate information aimed at the market. My study highlights how companies whose bonds have been purchased by central banks under QE policies tend to reduce the frequency and detail of their financial disclosures.”

Specifically, the study considers the evolution of voluntary disclosure in a sample of European companies whose bonds have been included in the European Central Bank's Corporate Sector Purchase Program (CSPP) since 2016. The results suggest a decrease in such disclosures, particularly those related to cash flows and liabilities.

“This phenomenon can be explained by a lower demand for detailed information by central banks, compared to traditional institutional investors such as investment funds and insurance companies,” Vincenzi adds. “My research highlights the need to consider such indirect consequences of monetary policies.”

The importance of these findings lies in their ability to influence future regulatory policies and corporate strategies in response to central banks’ actions. “It is important for regulators, policymakers and firms to recognize these effects in order to navigate the global financial ecosystem with greater awareness,” Professor Vincenzi concludes.

Vincenzi's study contributes to the literature about the impact of monetary policy on corporate behavior and about how the composition of a company's stakeholders can influence its financial communication policies.