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OECD Sovereign Borrowing Outlook 2014

image of OECD Sovereign Borrowing Outlook 2014

Each year, the OECD circulates a survey on the borrowing needs of member countries. The responses are incorporated in the OECD Sovereign Borrowing Outlook to provide regular updates of trends and developments associated with sovereign borrowing requirements and debt levels from the perspective of public debt managers. The Outlook makes a policy distinction between funding strategy and borrowing requirements. The central government marketable gross borrowing needs, or requirements, are calculated on the basis of budget deficits and redemptions. The funding strategy entails decisions on how borrowing needs are going to be financed using different instruments (e.g. long-term, short-term, nominal, indexed, etc.) and distribution channels.



Accordingly, the OECD Sovereign Borrowing Outlook provides data and information on borrowing needs and funding policies for the OECD area and country groupings, including gross borrowing requirements, net borrowing requirements, central government marketable debt, funding strategies and instruments and distribution channels.

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Challenges in primary and secondary markets

Challenges for sovereign issuers are analysed, based on surveys of OECD debt managers, including the impact of direct bidding, syndication practices and the expected impact of (new) regulations. The way a more challenging issuance environment has affected the functioning of secondary government securities markets is also considered.Issuance conditions vary from issuers without full market access, to sovereigns suffering from the consequences of relatively unsuccessful auctions, to the fairly large group that had more or less unchanged issuance conditions.Many sovereign debt management offices adjusted their issuance procedures and introduced new types of instruments in response to a challenging issuance environment. Moreover, with the greater role of central banks (foreign and domestic) in government bond markets, maintaining a diversified investor base has become more difficult.Challenges also include the pressure on existing primary dealer systems and the impact of forthcoming regulations on primary markets.

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