Central Bank and Government Debt Management: Issues for Monetary Policy

21 Pages Posted: 13 Apr 2013

See all articles by Andrew J. Filardo

Andrew J. Filardo

Bank for International Settlements (BIS) - Monetary and Economic Department

Madhusudan S. Mohanty

Bank for International Settlements (BIS) - Monetary and Economic Department

Ramon Moreno

Self employed

Date Written: October 1, 2012

Abstract

The size and maturity structure of the government debt market have important implications for monetary policy, especially in EMEs. This paper documents the remarkable growth of the market over the past decade in terms of size, issuance and maturity structure of combined government and central bank debt, and notes that a large part of the official sector debt constitutes short-term securities issued by central banks to sterilise their foreign exchange interventions. The paper then explores what these trends imply for the yield curve and for bank lending behaviour, and highlights potential conflicts that may arise when the mandates of government debt managers differ from those of the central bankers.

Full publication: Fiscal Policy, Public Debt and Monetary Policy in Emerging Market Economies

Keywords: debt management, monetary policy

JEL Classification: H63, E52

Suggested Citation

Filardo, Andrew J. and Mohanty, Madhusudan S. and Moreno, Ramon, Central Bank and Government Debt Management: Issues for Monetary Policy (October 1, 2012). BIS Paper No. 67d, Available at SSRN: https://ssrn.com/abstract=2205197

Andrew J. Filardo (Contact Author)

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Madhusudan S. Mohanty

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Ramon Moreno

Self employed ( email )

Basel
Switzerland

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