During the 17th Public Debt Management Forum in Tokyo, 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.
The longer-term advantage
Mr. 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 debt management policy
The State Minister of Finance Mr. 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.
Source: https://www.imf.org
