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A Primer on Managing Sovereign Debt-Portfolio Risks

Author

Listed:
  • Thordur Jonasson
  • Mr. Michael G. Papaioannou

Abstract

This paper provides an overview of sovereign debt portfolio risks and discusses various liability management operations (LMOs) and instruments used by public debt managers to mitigate these risks. Debt management strategies analyzed in the context of helping reach debt portfolio targets and attain desired portfolio structures. Also, the paper outlines how LMOs could be integrated into a debt management strategy and serve as policy tools to reduce potential debt portfolio vulnerabilities. Further, the paper presents operational issues faced by debt managers, including the need to develop a risk management framework, interactions of debt management with fiscal policy, monetary policy, and financial stability, as well as efficient government bond markets.

Suggested Citation

  • Thordur Jonasson & Mr. Michael G. Papaioannou, 2018. "A Primer on Managing Sovereign Debt-Portfolio Risks," IMF Working Papers 2018/074, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2018/074
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    References listed on IDEAS

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    2. Aitor Erce & Xu Jiang & Diana Zigraiova, 2020. "Quantifying Risks to Sovereign Market Access: Methods and Challenges," Globalization Institute Working Papers 377, Federal Reserve Bank of Dallas.
    3. Mauro Bucci & Ilaria De Angelis & Emilio Vadalà, 2020. "Don’t look back in anger: The use of derivatives in public debt management in Italy," Questioni di Economia e Finanza (Occasional Papers) 550, Bank of Italy, Economic Research and International Relations Area.
    4. Plessen-Mátyás, Katharina & Kaufmann, Christoph & von Landesberger, Julian, 2021. "Funding behaviour of debt management offices and the ECB’s public sector purchase programme," Working Paper Series 2552, European Central Bank.

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