Debt Management
ECB paper examines shifts in fiscal regimes
Study finds responsibility for stabilising debt levels has swung between monetary and fiscal authorities in UK, Germany and Italy; most clearly defined in UK
IMF research warns short-term fiscal consolidation pain could become more serious
Paper says short-term growth impact from fiscal tightening could be worsened if markets or policy-makers overreact; emphasises this does not mean budget cuts should be scrapped
Bank of Finland highlights ‘astonishing’ lack of information on Chinese government debt
Researcher warns opaque debt statistics are to China’s detriment and could threaten renminbi internationalisation; urges government to begin politically difficult process of improving transparency
Irish paper finds more spending could help government’s ‘precarious’ finances
Central Bank of Ireland research technical paper suggests country’s close sovereign-bank link means government spending to reduce mortgage arrears will have a greater effect than previously thought
ECB reveals Italian dominance of emergency securities purchases
Data on purchases of individual countries’ bonds under the Securities Markets Programme released for first time; annual accounts show half of €1.1 billion bond profits came from Greece
BoE paper finds impatience increases austerity costs
Discussion paper finds close link between a country’s time preference and its fiscal multiplier, implying that countries wanting a slower fiscal adjustment face higher costs to austerity
IMF paper identifies trends in fiscal profligacy
Working paper analyses dataset of countries’ fiscal performance over time, finding an imperfect response to changes in the underlying economy
Irish governor bemoans sustained large sovereign spread
Patrick Honohan says the cost of Ireland’s funding still reflects a credit risk premium; Government’s €2.5 billion bond issuance met by ‘strong’ investor response
US thrashes out partial solution to fiscal cliff
US government reaches agreement that postpones and reduces fiscal cliff; measures unlikely to have significant impact on Fed policy, some observers say
Buba’s Weidmann on the virtues of sound finances
Bundesbank president stresses the need for fiscal rectitude in monetary union
Study highlights Ireland’s ‘high’ external debt
Central Bank of Ireland economic letter shows that Ireland’s gross external debt is high by international standards, but lower than headline figures
Chile’s Vergara draws parallels between LatAm and eurozone crises
Governor of the Central Bank of Chile says Latin America’s sovereign debt crisis of the 1980s has similarities with current situation in eurozone; despite ‘lost decade’, better policies resulted
Serbian vice-governor seeks bond market progress
Veselin Pješčić encourages development of the Serbian debt market through more products and wider activity
Emerging market bonds behaving as safe assets, says BIS paper
Local government bond yields in emerging market economies have contracted as global risk sentiment worsens, study suggests
RBI pushes government to act on fiscal consolidation promises
Reserve Bank of India chief calls on government to make concrete progress on fiscal consolidation as central bank holds rates but cuts reserve requirements
Ukraine issues US dollar bonds aimed at retail investors
Ukraine government is issuing US dollar-denominated bonds targeted at domestic retail investors, despite previous warning by central bank director about Ukrainians taking on forex risk
Irish deputy governor calls for fiscal surpluses
Stefan Gerlach analyses different approaches to debt reduction; finds fiscal surpluses are the most suited to the current financial environment
Ireland unlikely to comply with fiscal compact until 2020
Central Bank of Ireland 'economic letter' estimates it may be 2020 before Ireland complies with the EU fiscal compact’s structural deficit target
IMF working paper critical of short-term austerity measures
IMF study suggests debt burdens should be addressed longer-term when economies are in expansionary mode; short-term austerity may do more harm than good
IMF mission begins new talks with Serbia
Fact-finding mission focuses on macroeconomic outlook, fiscal situation and effects of changes to the central bank law; government reveals efforts to cut budget
Bundesbank paper investigates how relationships impact interbank lending
Bundesbank study reveals importance of good relationships to the liquidity of interbank markets; private information determines banks' willingness to lend and the price of their loans
IMF paper studies emerging market bond spreads
Working paper tests different explanatory variables for emerging market bond spreads over time; finds importance may change based on business cycle and external factors
IMF paper assesses Basel III liquidity buffer measure
Working paper proposes an extra measure of systemic risk to complement Basel III; suggests incentives for financial institutions to internalise risk
Can Japan afford to grow?
Japan has managed to maintain living standards during its two ‘lost decades’, but its efforts to do so now represent obstacles to achieving sustainable growth. By Ryo Watabe.