Content area
Full Text
Retail borrowing programmes are one component of government debt issuance in both OECD and non-OECD countries.
These programmes take a variety of forms and often exist to satisfy a number of objectives. In some jurisdictions, they play a significant funding role. Even in countries where retail borrowing programmes play a small role, they are in many cases politically important because they satisfy primarily social objectives.
In recent years, some OECD countries have begun to reconsider their retail borrowing programmes. Shrinking borrowing requirements in a number of countries have led to priority being put on maintaining liquid wholesale markets. Other countries continue to see benefits from their retail borrowing programmes and use them as a significant and stable source of funding. These governments are often innovative at finding ways to drive down administration costs, such as through the use of new electronic distribution channels and total dematerialisation of securities.
I. Introduction and overview
Retail borrowing programmes...
Retail borrowing programmes are one component of government debt issuance in both OECD and non-OECD countries.
...take a variety of forms and satisfy a number of objectives
These programmes take a variety of forms and often exist to satisfy a number of objectives. In some jurisdictions, they play a significant funding role. Even in countries where retail borrowing programmes play a small role, they are in many cases politically important because they satisfy primarily social objectives.
Countries have begun to reconsider their retail borrowing programmes
In recent years, some OECD countries have begun to reconsider their retail borrowing programmes, whereas other countries continue to see benefits from these programmes and use them as a significant source of funding. These reviews are in part driven by shrinking borrowing requirements and the availability of new distribution technologies.
OECD provides a platform to discuss policy perspectives
This article discusses recent policy perspectives by the OECD Working Party on Debt Management on the role of retail borrowing programmes, based on its leading practices concerning cost-effectiveness and risk.2 It also benefited from recent discussions at the Sixteenth Annual OECD Global Forum on Debt Management and Emerging Government Securities Markets, held in Amsterdam in December 2006.
This article proceeds as follows. Section II describes the design of retail borrowing programmes currently in use, and Section III...