Real Money Investors and Sovereign Bond YieldsLaura Jaramillo and Yuanyan Zhang No 2013/254, IMF Working Papers from International Monetary Fund Abstract: Experience from the global financial crisis suggests that countries’ borrowing costs are not solely determined by macro and fiscal fundamentals. Factors such as ownership structures of government securities, among others, also play a significant role. This paper investigates the effect of “real money investors”—domestic nonbanks and national and foreign central banks—on bond yields for a sample of 45 advanced and emerging market economies. The results show that, while bond yields rise with the debt to GDP ratio, this increase is partly offset if this debt falls in the hands of real money investors. Nonetheless, for some countries there is the risk that such ownership structure could change over the long run, which would impose upward pressure on borrowing costs, especially where fiscal positions are weak. Keywords: WP; bond yield; investor; holding; debt; money; Public Debt; Government Bonds; Investor Base; Advanced Market Economies; Emerging Market Economies; money investor; ECB securities market program holding; nonbank holding; investor holding; Bond yields; Yield curve; Foreign banks; Sovereign bonds; Asia and Pacific; North America; Global (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2013/254 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC. |
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