LUKANYO MNYANDA: Central banks buying company bonds can lead to unintended consequences
European Central Bank bought Steinhoff bonds after it expanded its asset purchase programme to include corporate debt
What if the Reserve Bank bought the bonds of Eskom, Edcon or any sickly company you can think of?
It’s not as crazy as it sounds, considering none other than the mighty European Central Bank (ECB) once found itself as a proud owner of bonds issued by Steinhoff. That company, if anyone needs reminding, is now best known for perpetrating SA’s biggest-yet corporate fraud...