The relations between European capital market and ECB monetary policy

Euro Area monetary policy and capital markets mutually affect each other’s indicators. In the frame of this research, we aimed to analyse and forecast the European Central Bank’s monetary policy influence on capital market segments. We based our study on structural vector autoregressive model methodology. Employing different scenarios, we forecasted the values of the government bond, corporate bond and stock market indicators in Euro Area, in response to the ECB monetary policy changes.