News Release
Publication of Bank of England Conference Volume: "Government debt structure and monetary conditions" edited by K. Alec Chrystal
14 December 1999
The Bank of England today publishes the proceedings of a conference on government debt structure and monetary policy, held in June 1998. The aim of the conference was to discuss the interactions between the size and structure of government debt and the concerns of monetary policy.
The conference papers are all related to three main channels through which government debt structure might influence monetary conditions:
- the quantity of debt
- the composition of debt (maturities, index-linked or conventional)
- the ownership of debt (e.g. by banks or non-banks)
The broad conclusions are that: debt-management and monetary policy concerns can now be largely separated; debt composition can have some effect but these effects are likely to be very small; and, it probably makes little difference who holds the debt. Overall, the economic research discussed at the conference suggested that changes in debt management policy at the margin were unlikely to have first-order effects upon monetary conditions. But two important caveats are needed. First, many aspects of the transmission mechanism and optimal debt management are not well understood. Second, there are few, if any, examples of extreme changes by government in debt management policy. So it is less clear that large changes in the quantity or composition of the debt will not have implications for monetary conditions. For these reasons, the effects of changes in debt management policy on monetary aggregates need to be monitored and interpreted with care.
The conference volume can be obtained from the Bank of England, Publications Group (Tel +44(0)20 7601 4030 or Fax +44(0)20 7601 3298) price £10. You may also use the attached order form.
A summary of the conference themes was discussed in an article Government debt structure and monetary conditions published in the latest edition of the Bank of England Quarterly Bulletin (November 1999) pp393-396.
