Public debt management forum tackles new instruments and new investors in sovereign markets

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WASHINGTON, USA — The International Monetary Fund (IMF) and the Japanese ministry of finance co-hosted the 17th Public Debt Management Forum in Tokyo on June 20 and 21.

The event brought together senior officials from 33 advanced and emerging market economies, international financial institutions, and leading global and Japanese private sector firms.  

Participants discussed the trends and associated challenges and opportunities they now face in sovereign debt capital markets. Public debt managers have been able to deal with high and rising debt levels against the backdrop of mostly benign global conditions: accommodative policies in the major economies have kept interest rates low and contained spreads and funding risks. It remains, uncertain, however, what strains will emerge when financial conditions eventually tighten.

Meanwhile, the investor base for government securities is shifting and becoming more globalized. Furthermore, market functioning is evolving under the influence of regulatory changes, technological innovation, and the introduction of new instruments.

Tobias Adrian, the IMF’s Financial Counsellor and the Director of the Monetary and Capital Markets Department, said in the forum’s keynote address that “sound debt management and the efficient functioning of sovereign debt capital markets is as important as ever, not least because debt levels are high and are likely to remain high.”

He noted that debt management is of macroeconomic importance: Debt managers need to take into account macroeconomic conditions in setting their strategy, and also to anticipate the effects of their actions elsewhere in the economy. Moreover, he stressed the longer-term advantage to both borrowers and investors of promoting debt transparency as the basis for the efficient, stable and cost-effective financing of public goods.

The State Minister of Finance Keisuke Suzuki, in his opening remarks described the global situation surrounding the debt management policy and the government bond market, and he highlighted that the Forum would provide a valuable opportunity to discuss the policy based on such circumstances.

He also explained the Japanese economic and fiscal situation and debt management policy, in order to make the sessions more fruitful. He said that he expected that each participant could gain new insights and ideas on the debt management policy and the government bond market through active and constructive discussions in the forum.

The next IMF Public Debt Management Forum will take place in 2021.

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