{
  "title": "Sovereign Eurobond Liquidity and Yields",
  "publication": "IMF Working Papers, May 20, 2022",
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  "summary": "Market liquidity is of value to both investors and issuers of securities, and is therefore a crucial factor in asset pricing.",
  "sections": [
    {
      "heading": "Core findings",
      "content": "- Market liquidity is valuable to both investors and issuers and is a crucial factor in asset pricing.\n- For Eurobonds, there is significant feedback from liquidity to pricing.\n- Bid-ask spreads (used as a proxy for market liquidity) and yields are closely related to bond characteristics such as:\n  - issue volume\n  - time to maturity\n  - the inclusion of collective action clauses\n  - the jurisdiction of issuance\n- Debt management offices can choose these bond characteristics in ways that have economically significant and persistent effects on both liquidity and pricing."
    },
    {
      "heading": "Implications for debt management and policy",
      "content": "- Instrument design (issue volume, maturity choice, inclusion of collective action clauses, and choice of jurisdiction) is a policy lever that affects market liquidity and sovereign borrowing costs.\n- Adjustments to these characteristics can produce persistent changes in both bid-ask spreads and yields, implying long-term effects on debt servicing costs and market access."
    },
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      "heading": "Research scope and framing",
      "content": "- The analysis treats bid-ask spreads as a proxy for market liquidity and links liquidity measures to pricing outcomes for the Eurobond asset class.\n- Emphasis is placed on actionable characteristics under the control of issuers (debt management offices) rather than purely external market factors.\n\nSource: https://www.imf.org/en/publications/wp/issues/2022/05/20/sovereign-eurobond-liquidity-and-yields-518222\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2022/05/20/sovereign-eurobond-liquidity-and-yields-518222"
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    "Authors: Daniel C Hardy",
    "Published: May 20, 2022",
    "Series: IMF Working Papers",
    "Market liquidity is valuable to both investors and issuers and is a crucial factor in asset pricing.",
    "For Eurobonds, there is significant feedback from liquidity to pricing.",
    "Bid-ask spreads (used as a proxy for market liquidity) and yields are closely related to bond characteristics such as:",
    "Debt management offices can choose these bond characteristics in ways that have economically significant and persistent effects on both liquidity and pricing.",
    "Instrument design (issue volume, maturity choice, inclusion of collective action clauses, and choice of jurisdiction) is a policy lever that affects market liquidity and sovereign borrowing costs.",
    "Adjustments to these characteristics can produce persistent changes in both bid-ask spreads and yields, implying long-term effects on debt servicing costs and market access.",
    "The analysis treats bid-ask spreads as a proxy for market liquidity and links liquidity measures to pricing outcomes for the Eurobond asset class.",
    "Emphasis is placed on actionable characteristics under the control of issuers (debt management offices) rather than purely external market factors.",
    "**Working Paper**"
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