Title |
Debt Management _ Theory and Practice |
|---|---|
Country |
United Kingdom |
Abstract |
The primary objective of UK debt management policy is to minimise cost over the long term, taking account of risk, whilst ensuring consistency with the objectives of monetary policy. However defining what makes up the "optimal" portfolio to meet this objective is a difficult problem. The paper examines several different theoretical approaches to the question.
The conclusion is that current research has provided a number of useful insights into the conduct of debt management policy, and that on the whole, these are reflected in current UK policy. However there are also a number of areas where there is a gap between theory and practice, which need to be more carefully explored. Overall, current research does not yet appear to provide sufficient guidance as to the optimal debt portfolio. The paper then suggests some areas for further research, which would help to illustrate the costs and benefits of different debt portfolios. An executive summary is provided at the beginning of the paper. |
Author(s) |
Leong Donna - Economic Advisor, HM Treasury, United Kingdom |
Language |
English |
Series |
Treasury Occasional Paper |
Date of Publication |
1999 |
No./Date |
10 |
URL |
http://treasury.worldbank.org/[..] |
Number of pages |
43 |
Table of contents |
Executive summary
1. Introduction 2. Background 3. The debt management objective 4. Does debt management matter? 5. Debt management and monetary policy 6. Minimising cost Improving market efficiency Implications for debt management 7. Taking into account risk Distortionary taxes and the optimal taxation approach Using conventional securities Empirical results Implications for debt management 8. Role of government in financial markets Implications for debt management 9. Time inconsistency, government debt and inflation Implication for debt management 10. Conclusions What's missing from the literature? What does the literature tell us? Improving debt management policy |
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The aim of our Discussion Forum is to promote dialogue on specific topics proposed by the Secretariat and by Partners.
