Debt Management
German debt office poised to collateralise swaps
Pending 2014 budget would allow Finanzagentur to post up to €8 billion in collateral
Zimbabwe central bank aims to regain LORL and rate-setting powers
The Reserve Bank of Zimbabwe set to offer overnight lending to banks at a rate based on government debt yields from the end of March; will also begin issuing government treasuries
Central Bank of Venezuela seen in debt reshuffle
The central bank will reportedly buy securities from the country's mining corporation with debt accumulated from the state-owned oil company
Central Bank of Iceland to offload Kaupthing bonds acquired in the crisis
The bank will sell $860 million worth of covered bonds issued by Kaupthing Bank before the financial crisis over the next five years
RBA's Stevens says exchange rate disconnected from fundamentals
RBA governor Glenn Stevens says Australia's current exchange rate is not supported by the country's relative levels of costs and productivity
Central Bank of UAE set to bolster ‘under-developed' local bond market
UAE has looked to economies with strong trade balances as role-models to help develop a domestic bond market; may issue government debt in the coming years
Central Bank of Ireland diverges from Basel III on AFS bonds
Irish bank capital numbers would filter out unrealised gains and losses on government bonds
Japan’s ministry of finance issues inflation-indexed JGBs after five-year absence
First linker issuance in Japan since 2009 is 3.7 times oversubscribed but success of future auctions will depend on the Bank of Japan’s ability to deliver 2% inflation
Australian sovereign bond market infrastructure developments analysed
Reserve Bank of Australia article provides an overview of the CBS market and assesses recent changes in the market infrastructure
Kenyan governor urges bond market reform
Njuguna Ndung’u calls for a wider trading platform in the secondary market to incorporate OTC products; criticises the ‘slow pace’ of reforms so far
ECB relaxes collateral rules to include more ABS
ECB changes rules on acceptable collateral to include asset-backed securities with two single A ratings; haircuts on ABS are also cut
Paper finds global beats local in determining short-run sovereign bond spreads
Global factors tend to drive spread changes particularly during periods of severe market stress
India issues inflation-indexed bonds to curb gold imports
India's debut issuance of inflation-linked bonds four times over-subscribed despite the launch coming as wholesale price inflation has tapered off; could be credit negative for India
ECB lifts ban on Cypriot ‘junk' bond eligibility
Rule suspension allows Cypriot government-issued or guaranteed debt instruments to be used as collateral in Eurosystem operations; follows precedent set for Greece in September 2012
The Dutch are ‘poorly informed’ about country’s debt
Central bank survey finds that the Netherlands’ population underestimates the size of the country’s public debt, and wrongly attributes its creation to support for banks and other European governments
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