Sovereign debt
Danish annual report highlights move into equities
National Bank of Denmark implemented new investment strategy in 2014, adding riskier assets including equities and lower-rated government bonds to reserves
ESRB group wants treatment of sovereign debt reviewed
Report published by European Systemic Risk Board argues sovereign debt can no longer treated as risk-free, and outlines different ways the regulatory framework could be adapted
Colombian paper analyses relationship between term premia in US and Latin America
Brazil and Colombia are the Latin American countries with the largest responses to changes in the US term premium, according to research published by the Central Bank of Colombia
Are central banks the ‘Figaro’ of the financial markets?
Central banks continue to play a vital position in the functioning of markets. While this raises significant concerns about moral hazard it is not an unfamiliar role from an historical perspective
Book notes: Sovereign debt management, by Rosa María Lastra and Lee Buchheit
An immensely valuable compilation of contributions by lawyers and several economists on sovereign debt. This book is eminently readable, in spite of its difficult subject matter
BoJ nominee Harada: monetary stimulus, fiscal discipline
A review of Yutaka Harada’s published papers and articles reveals the Bank of Japan Policy Board nominee is likely to favour more stimulus from the central bank and less from the government
IMF calls for reform at Madagascar central bank
Staff report says central bank needs greater independence and stronger oversight mechanisms; new audit committee on the way and government agrees to recapitalise institution
Government spend no more effective at ZLB – NBER paper
US government spending did not become more powerful when monetary policy hit a zero lower bound, according to a working paper published by the National Bureau of Economic Research
Linde fears ‘revival’ of debt sustainability concerns
Concerns about the sustainability of European sovereign debt have not disappeared and could be reactivated if the economic conditions worsen, says Linde
Praet explores QE transmission channels
ECB chief economist considers scope of portfolio rebalancing and signalling effects for both corporate and sovereign bond purchases
Robert Pringle’s Viewpoint: Time to cure central bankers’ deflation phobia
The policies followed since the ‘great crisis’ have not succeeded in restoring confidence. It is time to try a different approach
Spain ‘decoupled’ from other eurozone economies, says Banque de France paper
Working paper warns Spanish economy’s convergence with eurozone is ‘sluggish and incomplete’, with the sharpest decoupling beginning a year before the sovereign debt crisis
Carney dismisses call for helicopter money
Bank of England governor says he ‘cannot envisage any circumstance’ where direct central bank financing of government debt would be justified – but some central banks may already be doing it
Trinidad and Tobago SWF set to gain corporate status
Incorporation will enable Heritage and Stabilisation Fund to hire staff and build capacity, says chairman Ralph Henry; ‘decent’ returns this year, he says
ECB eases collateral requirements for Greek bonds as borrowing costs soar
European Central Bank says it will reduce the haircut it applies to Greek government bonds, but insists it is not an ‘ad hoc reaction’ to this week’s market stress
Belgian review: Common debt will remain ‘taboo’ in Europe
Article published in National Bank of Belgium economic review describes the issuance of common debt as a ‘panacea’ for multiple problems in the eurozone
European Court of Justice hears case against OMTs
European Central Bank’s programme for buying sovereign debt to be considered by Europe's top court; ruling could have implications for monetary policy
BIS paper proposes defence against market panics
Proposal would see governments link level of borrowing to interest rates, breaking the vicious cycle of rising rates leading to increased default risk
IMF calls for ‘modified pari passu clauses’ in new international sovereign bonds
Executive board supports contractual reforms making process of sovereign debt restructuring ‘more orderly’; Staff paper outlines stronger collective action clauses
Polish paper explores market perception of sovereign credit risk
Working paper finds macroeconomic and institutional developments were 'weakly correlated’ with market perception of sovereign credit risk in eurozone during crisis
Summers calls on Fed and US Treasury to 'fully' coordinate debt management
Paper published today finds Treasury purchases of long-term bonds offset ‘about a third’ of QE benefits to US economy post-crisis; Fed governor dismisses controversial proposal
Supreme Court clears Central Bank of Sri Lanka over Greek investment
Sri Lankan governor and monetary board members cleared over investment in Greek government bonds; Supreme Court says investment decisions ‘best left to central bank’
IMF paper says long-term debt creates ‘incentive to default’
Research examines relationship between maturity structure of sovereign debt portfolios and the probability of default; considers impact of uncertainty around future fundamentals
Debt accumulation in advanced countries historically absorbed by increases in short-term foreign debt
IMF paper examines how composition of public debt answered to consolidation periods between 1900-2011; common pattern was broken during 1980s and 1990s