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The European Stability Mechanism (ESM) welcomes the decision by S&P Global Ratings (S&P) to assign the entity with a long-term AAA rating, a short-term A-1+ rating, and a stable outlook.

S&P's decision is based on the ESM's extremely strong enterprise risk profile and financial risk profile. This underlines the ESM's uniquely robust capital structure and strong shareholder base, consisting of the 19 euro area member states. The ESM also enjoys very high long-term ratings by Fitch (AAA) and Moody’s (Aa1).

The result of the auction of 4 August 2020 for the 3-months Bills of the ESM was as follows:

Total Bids €10,433.00mn
Competitive bids €2,337.00mn
Non-competitive bids €8,096.00mn
Allotment / Issue volume €1,998.48mn

The study uses meta-analysis to investigate why different papers report conflicting evidence on the forward premium puzzle and finds that the puzzle is much less prevalent than commonly thought.

Authors: Diana Zigraiova (ESM), Tomas Havranek and Jiri Novak (Charles University, Prague)