Debt Levels and Structure

In recent times debt levels have surged to unprecedented highs in both developed and emerging markets, and the Covid-19 pandemic has amplified this trend.

This category of the blog tackles issues related to the level and nature of debt, features of sovereign indebtedness, and the creditor landscape. Among other topics, we discuss:

• The scope and measurement of sovereign debt; the proper accounting of SOEs, implicit guarantees, and other contingent liabilities.
• The determinants of public debt dynamics, such as fiscal balances, interest rates and GDP growth, and their effect on long-term sustainability.
• The type of debt, such as marketable securities or bespoke bilateral loans, and its features – such as its maturity, currency denomination, indexing, and legal jurisdiction.
• The composition of creditors: whether private (such as banks, investment funds, or retail investors) or official (such as international financial institutions and other sovereign states); whether foreign or domestic (banks and central banks, in particular).
• The need for more transparent data on debt levels, holdings, and contractual terms.