Government Debt Issuance and Management
The United States Department of the Treasury provides
technical assistance in support of the development of
market-based means of public finance around the world. The
program is designed to assist countries in the establishment
of sound and sustainable approaches to managing domestic and
external debt obligations.
Domestic currency denominated government securities play a
crucial role in fiscal and monetary policy. Under appropriate
circumstances, government securities may provide a
non-inflationary means of public finance to sovereign
governments. The securities, and the markets in which they
trade, may be used for open market operations by the central
bank. In most developed countries, government securities
markets provide the foundation for all other financial asset
markets by supplying a benchmark yield curve and a basis for
risk management tools. Government securities are routinely
used to recapitalize banking systems after systemic failure
and they provide an alternative to external finance in an era
of repeated crises in external capital markets. These factors
uniquely link government securities market development to the
macroeconomic stabilization and structural reform agendas that
characterize transition and developing economies and economies
recovering from shock. Accordingly, development of domestic
government securities and markets in which they can trade
often comprise conditions for International Monetary Fund (IMF)
and World Bank balance of payments support facilities.
Treasury’s Government Debt Issuance and Management Program
fields resident and short-term (intermittent) advisors with
extensive U.S.-based market experience. Their work is focused
on assisting foreign government officials responsible for debt
management to:
- Recognize the special role that domestic-currency
denominated sovereign government securities play in
non-inflationary fiscal finance, monetary policy
implementation, the development of financial markets, and
the ability to manage crises;
- Develop a coherent debt management strategy that
includes selection of maturity, currency, and other terms
and conditions based on sound risk management principles
applied in an appropriate organizational setting supported
by effective recording, reporting, control, analysis, and
management information systems;
- Implement market-based issuance practices and trading
mechanisms that support transparency, efficiency, and
liquidity in financial markets;
- Establish access to the full range of financing sources;
- Create and maintain a benchmark yield curve;
- Coordinate instruments and markets with the central bank
or fiscal agent;
- Manage explicit contingent liabilities; and
- Implement a comprehensive legal and regulatory
environment for the issuance, management, and trading of
government securities.
Last Updated: December 30, 2005
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