Government Debt Management in Europe: Recent Changes in Debt Managers’ Strategies

Abstract

This paper presents a survey of changes in the strategies of government debt managers in European countries. These changes were introduced in response to alterations in the working environment of debt managers, like the introduction of the euro, declining government debt ratios, the introduction of electronic trading systems, and the changed institutional position of debt managers. An important recent feature of debt management strategies in the euro area is the convergence of practices. There is a clear tendency to issue ‘plain vanilla’ bonds, while there is less emphasis on issuing foreign currency debt. Debt managers increasingly use interest rate swaps and introduce innovative instruments, such as inflation-indexed bonds.