IMF Working Papers

A Primer on Managing Sovereign Debt-Portfolio Risks

By Thordur Jonasson, Michael G. Papaioannou

April 6, 2018

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Thordur Jonasson, and Michael G. Papaioannou A Primer on Managing Sovereign Debt-Portfolio Risks, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

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.

Subject: Asset and liability management, Bonds, Credit risk, Debt management, Financial institutions, Financial regulation and supervision, Government debt management, Public debt, Public financial management (PFM)

Keywords: Bond issue, Bonds, Borrowing cost, Credit risk, Debt management, Debt manager, Debt portfolio, Exchange rate risk, Financial Risk, Foreign currency, Foreign Exchange Hedging, Global, Government debt management, Government Securities Markets, Interest rate, Portfolio risk, Public Debt Management, Short-term debt, WP

Publication Details

  • Pages:

    133

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2018/074

  • Stock No:

    WPIEA2018074

  • ISBN:

    9781484350546

  • ISSN:

    1018-5941

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