By the late 1990s, longer-term instruments accounted for the larger part of government debt, as debt managers sought to minimise re-financing as well as nominal risk, Debt Management and Government Securities Markets in the 21st Century shows. And liquid public debt markets proved to be key for the development of corporate debt markets, as the yield curve for government securities is important for correct pricing of corporate bonds.
But while liquidity in public debt markets increased significantly and a yield curve of benchmark bonds was established, market liquidity as well as overall debt levels still differs considerably across countries. Belgium, Greece, Italy and Japan all have debt levels of more than 100% of GDP, but the non-marketable share is larger in Greece and Japan than in Belgium and Italy.
©OECD Observer No 234, October 2002