  The long-lasting socio-economic impact of the global financial crisis has
questioned the adequacy of traditional tools in explaining periods of financial
distress, as well as the adequacy of the existing policy response. In
particular, the effect of complex interconnections among financial institutions
on financial stability has been widely recognized. A recent debate focused on
the effects of unconventional policies aimed at achieving both price and
financial stability. In particular, Quantitative Easing (QE, i.e., the
large-scale asset purchase programme conducted by a central bank upon the
creation of new money) has been recently implemented by the European Central
Bank (ECB). In this context, two questions deserve more attention in the
literature. First, to what extent, by injecting liquidity, the QE may alter the
bank-firm lending level and stimulate the real economy. Second, to what extent
the QE may also alter the pattern of intra-financial exposures among financial
actors (including banks, investment funds, insurance corporations, and pension
funds) and what are the implications in terms of financial stability. Here, we
address these two questions by developing a methodology to map the
macro-network of financial exposures among institutional sectors across
financial instruments (e.g., equity, bonds, and loans) and we illustrate our
approach on recently available data (i.e., data on loans and private and public
securities purchased within the QE). We then test the effect of the
implementation of ECB's QE on the time evolution of the financial linkages in
the macro-network of the euro area, as well as the effect on macroeconomic
variables, such as output and prices.
