Sovereign debt
Paraguay’s Valdovinos: bond issuance ‘not all about the money’
$500 million issuance was six-times oversubscribed, but the Paraguayan governor says its success lies in the message it sends to investors overseas
Bank of Spain paper calculates implicit public debt thresholds
Researchers build on earlier work and apply models to Spanish data
Asset manager of the year: State Street Global Advisors
Boston-based asset manager not only has depth and reach – it has taken customisable services to a new level
IMF resources may influence EM creditworthiness – paper
The level of fund resources are more important than the means of lending, the IMF researcher argues
Mersch: no political appetite for ‘European safe bonds’
The proposal for pooled, tranched bonds is “interesting”, but the public are likely to be suspicious
Denmark to trial primary dealer payments in effort to boost liquidity
Central bank says payments in exchange for tougher requirements should improve liquidity, which has shown signs of weakening
Dutch paper looks at sovereign bank interdependencies
Researchers apply correlation between sovereign and bank credit default swaps
ECB bulletin emphasises importance of monitoring uncertainty
Increases in uncertainty adversely impact the economy, research says, encouraging policymakers to introduce measures to mitigate its impact
Cœuré sets out sovereign debt reform ideas as Weidmann strengthens call to end QE
Two senior eurozone central bankers set out different visions for radical change to the handling of European sovereign debt
AnaCredit: banking with (pretty) big data
The supranational credit database in Europe will help policy-makers and banks assess cross-border risk when it goes live in 2018, writes Aurel Schubert, director-general of the European Central Bank’s statistics department
Output gap in euro area is much larger than official estimates – paper
Official estimates predict output gap 3–4% less negative than author’s results; current models do not “adequately capture” inflation developments
‘Moral suasion’ and yield-seeking intensified sovereign debt crisis – ECB paper
Researchers use information on 226 eurozone banks; publicly owned, recently bailed-out and less strongly capitalised banks engaged increased sovereign bond holdings during crisis
IMF paper examines impact of debt restructurings on growth
Growth usually declines after debt restructurings, but it can boost performance if the country exits a default spell, the authors find
Post-Brexit gilt auctions met with strong demand
Trends in gilt yields show UK debt still seen as ‘safe haven’ asset, says one analyst; others attribute strong demand in this week’s auctions to range of factors
Sri Lanka appoints new central bank governor
Arjuna Mahendran leaves central bank after enduring a turbulent 18 months; president appoints economist Indrajit Coomaraswamy as his successor
Lagarde encouraged Paris Club to broaden membership as South Korea joins
South Korea becomes 21st member of creditor country group; speaking at its 60th anniversary Lagarde stresses the value of expanding further
Asian central banks shift bond funds towards local currency debt
Eleven East Asia-Pacific central banks agree to close fund for buying US dollar debt issued in the region and invest the money in local currency debt instead
DMO will not change course after Brexit vote
Head of the UK Debt Management Office stresses principles of predictability and transparency ahead of gilt auctions next week; market reaction to S&P’s downgrade was “extremely muted”
Brexit wrong-foots some reserve managers
The sharp sell-off of UK assets following its decision to leave the European Union will create buying opportunities for others
Irish paper proposes three-phase model of volatility in bond markets
Irish paper finds ‘good’, ‘bad’ and ‘ugly’ phases in eurozone sovereign debt markets from 2003 to 2014; crisis not caused by changes to the shock mechanism, but by pre-existing cross-country links
Sri Lankan governor will not seek reappointment until inquiry passes
Arjuna Mahendran says he will not apply for reappointment until the parliamentary committee publishes the findings of a probe into bond issuance; his first term expires on June 30
Micro factors affect Italian banks’ sovereign debt purchases, paper argues
Italian banks’ sovereign debt purchases strongly affected by their balance sheet needs, Bank of Italy researchers argue; size of bank a key factor
Weidmann: GDP-linked bonds an ‘avenue worth exploring’
Eurozone countries should explore merits of GDP-linked bonds, Bundesbank president argues; says move could help revision of sovereign risk weightings and cites Bank of England work
Eurobonds could be double-edged sword, researchers say
Banque de France researchers propose a new model of banks’ holdings of own-country sovereign debt; high holdings deter moral hazard but may exacerbate crises, they say