VoxEU Column
by Xiang Fang, Bryan Hardy & Karen K. Lewis
Globally, government debt has increased substantially since the onset of the Covid-19 pandemic and geopolitical tensions. This columns asks who the investors that hold government debt are, and whether the ownership composition matters. Overall, as debt increases, non-bank investors, in particular investment funds, take up more of this debt than other investor groups. Emerging market sovereign investors are highly vulnerable to the presence or absence of non-bank investors. The behaviour of such investors is thus crucial for understanding sovereign debt sustainability.
Link:
VoxEU Column: Who holds sovereign debt and why it matters