This paper summarises and discusses results from a survey of the liquidity buffer practices of debt managers in OECD countries. It includes detailed information on their purpose, cost, level and investment. Where possible and relevant, comparisons are made with the results of an earlier survey conducted in 2011. Country case studies for Denmark, Portugal and Turkey provide a deeper insight into liquidity buffer practices.

While the level, investment, transparency and other governance features vary, the survey results show that keeping a liquidity buffer is a common practice among debt management offices in OECD countries. Sovereign debt managers view a liquidity buffer as an effective tool to address re-financing risk and liquidity risk that may arise for reasons such as, unexpected increases in borrowing needs, short-term mismatches in fiscal cash flows or the temporary loss of market access.