Government Bonds and Their Investors: What are the Facts and Do They Matter?

Sovereign Debt Composition in Advanced Economies: A Historical Perspective

“…Debt held by the domestic non-bank sector is defined as the residual share of debt not held by the central bank, domestic commercial banks, and non-residents.14 Recent efforts to collect information on sovereign debt holders includeAndritzky (2012);Arslanalp and Tsuda (2012);and Merler (2014). Taking into account differences in the definition of government (general government versus central government) and valuation (market value versus face value) the holdership data reported by these alternative sources are overall consistent with the ones in this paper.15 The 1970s marked the beginning of the era of financial globalization, during which non-resident holdings of sovereign debt denominated in the domestic currency of the issuing sovereign expanded rapidly, as discussed below.16 As detailed in the footnotes, sample constancy is not assured in these illustrations as some of the year-to-year fluctuations may be due to countries joining the sample.©International Monetary Fund.…”

Greece: Selected Issues

“… See Reinhart and Trebesch (2015) for a detailed discussion on the benefits and costs of external borrowing. Empirical studies of the relationship between the investor base and sovereign bond yields have been mixed as summarized byAndritzky (2012) andArslanalp and Poghosyan (2016).…”

Sovereign Debt Markets in Turbulent Times: Creditor Discrimination and Crowding-Out

“…The goal of this paper is to provide an analytical perspective on these issues. 4 We propose a theory with two key ingredients: creditor discrimination and crowding-out e¤ects. By creditor discrimination we mean that, in turbulent times, sovereign debt o¤ers a higher expected return to domestic creditors than to foreign ones.…”

“…Data comes from our sample-countries' Central Banks,Andritzky (2012) andMerler and Pisani-Ferry (2012). The vertical axis measures the logarithm of the ratio of each domestic sector's holdings to the total outstanding.…”

“…Additionally, the ECB has modi…ed its collateral rules to accept lower rated sovereign debt, provided liquidity through the Long-Term Repurchase Operations (LTRO), and even announced (on August 2012) the possibility of purchasing unlimited amounts of sovereign securities through Outright Monetary Transactions (OMT) 4. Our narrative has been, per force, short and focused on the elements that we emphasize later in the theory.…”