Cover IMF Working Papers
Government Debt Issuance in the Euro Area: The Impact of the Financial Crisis
Author: International Monetary Fund
Series:
IMF Working Papers
Volume/Issue:
Volume 2011: Issue 021
Language:
English
Publication Date:
01 Jan 2011
DOI:
https://0-doi-org.library.svsu.edu/10.5089/9781455211944.001
ISBN:
9781455211944
ISSN:
1018-5941
Pages:
29
Keywords:
WP; debt; deficit; investor; yield; sovereign debt; fiscal policy; sovereign debt management; debt issuance; DLTF debt; debt stock; foreign currency; debt variable; Inflation; Currencies; Industrial production; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper documents and analyzes crisis-related changes in government debt issuance practices in the 16 euro zone countries and Denmark. Using a newly constructed database on primary market debt issuance during 2007-09, we find evidence of a shift away from pre-crisis standards of best funding practices competitive auctions of debt instruments with a fixed coupon, long maturity and local currency denomination (DLTF). Exploiting the cross-country panel data dimension of the data, we conclude that the crisis and related changes in the macroeconomic environment and investor sentiment can account for a significant proportion of the deviation. The negative effect of the crisis on DLTF debt issuance was especially pronounced in high deficit and high debt euro area countries, and has forced governments to assume additional risk.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund