Financial Implications of the Shrinking Supply of U.S. Treasury Securities

Garry Schinasi (garry.schinasi@gmail.com), T. Smith and Charles Kramer

No 2001/061, IMF Working Papers from International Monetary Fund

Abstract: Recent improvements in fiscal positions in advanced countries have sharply curtailed the issuance of government securities and created the possibility that government securities could disappear in some countries. The possibility that this might occur in the United States has attracted the most attention, in large part because of the international role of the U.S. dollar and the widespread perception that U.S. treasury securities have the lowest total financial risk (the combination of credit, market, and liquidity risks) among U.S. dollar assets. This paper analyzes the unique features of government securities and links them to the important roles that government securities, in particular U.S. treasury securities, have come to play in national and international financial markets. The paper then identifies and examines financial market-oriented public policy questions raised by the shrinking supply of U.S. treasuries.

Keywords: WP; treasury securities; financial market; market participant; U.S. dollar; U.S. treasury securities; financial markets; public debt; government securities; fixed income; global bond; Securities; Government securities; Securities markets; Yield curve; Global (search for similar items in EconPapers)
Pages: 51
Date: 2001-05-01
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Citations: View citations in EconPapers (13)

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