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Alternative futures for Government of Canada debt management

Author

Listed:
  • Corey Garriott
  • Sophie Lefebvre
  • Guillaume Nolin
  • Francisco Rivadeneyra
  • Adrian Walton
Abstract
Purpose - This paper aims to present four blue-sky ideas for lowering the cost of the Government of Canada’s debt without increasing the debt’s risk profile. Design/methodology/approach - The authors argue that each idea would improve the secondary-market liquidity of government debt, thereby increasing the demand for government bonds, and thus, lowering their cost at issuance. Findings - The first two ideas would improve liquidity by enhancing the active management of the government’s debt through market operations used to support the liquidity of outstanding bonds. The second two ideas would simplify the set of securities issued by the government, concentrating issuance in a smaller set of bonds that would each be more highly traded. Originality/value - The authors discuss the ideas and give an account of the political, legal and operational impediments.

Suggested Citation

  • Corey Garriott & Sophie Lefebvre & Guillaume Nolin & Francisco Rivadeneyra & Adrian Walton, 2020. "Alternative futures for Government of Canada debt management," Journal of Financial Economic Policy, Emerald Group Publishing Limited, vol. 12(4), pages 659-685, January.
    • Handle: RePEc:eme:jfeppp:jfep-07-2019-0149
    DOI: 10.1108/JFEP-07-2019-0149
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    References listed on IDEAS

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    Cited by:

    1. Charles Bahr & Lee Hui Shan & Alfred Lam, 2020. "The Macroeconomic Effects of Public Debt: An Empirical Analysis of Evidence from Canada," Journal of Accounting, Business and Finance Research, Scientific Publishing Institute, vol. 10(1), pages 1-9.

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    More about this item

    Keywords

    Investment decisions; Asset pricing; Debt management; Financial markets; Market structure and pricing; H63; G12; G24;
    All these keywords.

    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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