Developments The Icelandic Minister of Finance decided to assign issuance of
domestic marketable securities, previously handled by the National Debt Management Agency
(NDMA), to the Central Bank of Iceland, which already was managing the Treasury's foreign borrowing. From 1 October 2007, NDMA ceased operations and its activities moved to the International and Market Department of the Central Bank—where the unit´s name will be "Government Debt Management" or "Lánamál ríkisins".
The New Zealand Debt Management Office (NZDMO) was named Sovereign Risk Manager of the Year in Risk magazine's 2007 Risk Awards, announced in its January 2007 issue. The
press release by The Treasury states that "over the last three years the Debt Management Office has almost doubled its volume of transactions and use of derivatives to better manage risk and add value to the
Government's portfolio, while its key risk measures have reduced by half in the same period." Risk magazine also acknowledged "NZDMO's role in providing foreign exchange services for the New
Zealand Superannuation Fund, and in hedging the foreign currency risk associated with the Government's contribution to the 2011 Rugby World Cup, Ministry of Defence helicopter purchases, and similar
transactions for a number of public sector entities." A copy of the press release can be obtained from
www.nzdmo.govt.nz.On 30 March 2006, the Inter-Agency Task Force on Finance Statistics (TFFS) launched the Joint External Debt Hub
(JEDH) at www.jedh.org. This joint launch is by the Bank for
International Settlements (BIS), International Monetary Fund (IMF), Organisation for Economic Co-operation and Development (OECD), and the World Bank and represents efforts to synergize international
advances in the area of external debt statistics. The JEDH brings comprehensive creditor/market and national data and metadata together in one central location. The JEDH includes a revised Joint Debt
Statistics (JDS) table as well as national external debt data from the World Bank's Quarterly External Debt Statistics (QEDS) database. The range of countries covered in the revised JDS is expanded to
include industrial countries. The JEDH replaces the existing creditor-sourced JDS table available at
www.oecd.org/statistics/jointdebt, which will be discontinued in due course.On 10 October 2005, the
International Debt Observatory
was launched in Brussels, Belgium. The website is a collaboration effort between debt campaign organisations, academics and experts in the debt field and is intended to offer credible and up-to-date alternative economic indicators of developing country debt. Indicators covered (by individual country) include:
- Debt service to fiscal revenues
- Debt service to education expenditure
- Debt service to public sector salaries
- Debt service to net ODA (Official Development Aid)
- Debt service to public investment
- Debt service per inhabitant
The website also contains a range of publications, comment pieces and links on debt issues from around the globe. The website http://www.oid-ido.org
will be trilingual (English, French and Spanish). The Organisation for Economic Co-operation and Development (OECD) and the Italian Treasury
have created the Network for Public Debt Management in Emerging Markets
(PDM Network). This is a complimentary new activity, which is part of the working programme of the OECD Working Party on Debt Management. The OECD-Italian Treasury initiative is a result of a proposal made during the 2001-2002 meetings of the OECD Working Party on Debt Management. The PDM Network started to operate on an informal basis within the 2002-2004 OECD Global Forums on Public Debt Management. The PDM network is a new, complimentary feature in the multilateral framework for co-operation in the area of public debt management by providing an electronic platform for continuous information exchange that supports an intensive and comprehensive electronic policy dialogue. The website address for the PDM Network is
http://www.publicdebtnet.org. The UK Debt Management Office (DMO) has its range of services further consolidated and extended by:
- supporting additional issues of the National Savings and Investments Guaranteed Equity Bond by reducing the Government's exposure to the equity market;
- an expansion of the Deposit Facility which allows a significantly higher number of local authorities to deposit surplus funds with the Debt Management Account;
- the merger with the Public Works Loan Board and Commissioners for the Reduction in National Debt. This means the DMO is now operationally responsible for handling loans to local authorities and
for managing funds for some government departments.
The Israeli Government Debt Management Unit
(GDMU), an office of the Ministry of Finance, was established in January 2002, by merging the Foreign Exchange Transaction Department, part of the Division of the Accountant General, with several sections of the Capital Market Department at the Capital Market, Insurance, and Saving Division. Until the GDMU was established, the Foreign Exchange Transaction Department had been responsible for the management of the government's external debt and the Capital Market Department had been in charge of managing the domestic debt. The two units were merged to improve the management of government debt by gathering all relevant policymaking bodies into a single unit, so that the cumulative insight of all concerned would improve the coordination of the two aspects of debt management. Other reasons for setting up the GDMU were the favorable experience of similar units in many advanced economies and the recommendations of the International Monetary Fund (IMF), the World Bank, and the Organization for Economic Cooperation and Development (OECD).
The GDMU is in charge of managing Israel's domestic and external debt and the development and implementation of an overall debt management strategy. In this context, the unit is responsible for issuing
tradable government bonds in Israel's domestic market and raising capital in international markets; initiating and promoting reforms and structural changes in the Israeli capital market, in particular the
secondary government bond market; constantly studying and monitoring global capital markets; providing information to the international rating agencies; cooperating with the Development Corporation for
Israel (the Israel Bonds Organization); and managing other countries' debts to Israel through the "Paris Club." The GDMU's goals are:
- To identify the optimal currency mix of the government's debt portfolio.
- To identify possible scenarios related to government debt, including cash flows in each scenario, and their probability.
- To identify the most efficient frontier (cost vs. risk) of different currency and fixed/floating weightings (benchmarking ).
- To improve the government-debt databases.
- To price the government's foreign currency transactions, private placements, and derivatives transactions.
- To examine principal and interest rate sensitivity to market changes for budgeting purposes.
On 11 June 2001, the Federal Republic of Germany Finance Agency GmbH
commenced operations as a registered company with the aim of arranging the Federal Government's debt management in a cost-optimum manner. Dr Peter Jabcke was appointed as the Managing Director. The objective of the company is to provide services for the Federal Ministry of Finance for financing the budget and cash requirements of the Federal Republic of Germany and its special assets on the financial markets. It enters the market in the name of and for the account of the Federal Government. The services provided to fulfill this function particularly include those involving the issue of German Government securities, borrowing by means of promissory notes, the use of derivative financing instruments and money market transactions (borrowing and placement) to balance the account of the Federal Republic of Germany at the Deutsche Bundesbank.
On 8 February 2001, the French Minister of Finance created an entity named
Agency France Trésor
(AFT) to manage government debt and treasury with the objective of minimising cost and maximising security. The AFT will not be an independent legal entity but a department of the Treasury Directorate answerable to the Minister of the Economy, Finance and Industry. The issuing policy of the AFT is designed to keep the government securities market liquid, attractive and safe. The policy will be guided by four major principles, regardless of the market environment:
- Simplicity:
French government debt consists of three standard classes of euro-denominated securities - OATs and BTANs for long-term finance and BTFs for treasury management.
- Liquidity:
Three policies are used to ensure that French government debt is the most liquid in the euro area:- (i) creation of a BTAN and OAT reserve; (ii) organisation of a group of primary dealers; (iii) development of an electronic trading system.
- Transparency:
AFT has opted for:- (i) auctions to issues securities; (ii) presentation of projected medium and long term government financing program at the beginning of each year; (iii) announcement of issuing conditions - line and target volume - on the previous Friday; (iv) regular information about government debt issues and management.
- Innovation:
AFT stays abreast of market demand and innovation in an environment in constant flux under the impact of technology progress.
In 2001, the National Treasury Management Agency of Ireland (NTMA) was assigned three new functions, in addition to the mandate to manage the National Pensions Reserve Fund (announced in 2000):
- State Claims Agency:
The mandate is to manage claims against the State to ensure that the State's liability and associated legal and other expenses are contained at the lowest achievable
level.
- Central Treasury Service:
To be offered to Local Authorities, Health Boards, Vocational Education Committees and other public bodies.
- Fund Investment Services:
To be available to Ministers who have funds under their management or control.
|
