More than a decade on from the Global Financial Crisis, while debt-to-GDP ratios are back around pre-crisis levels in some countries, debt burdens have continued to climb in others, exceeding 100% of GDP in some cases. The challenges sovereign debt managers are confronting in an environment of high debt burdens and relatively tighter financial conditions have been compounded by recent political uncertainties. OECD governments will also need to refinance around 40% of their outstanding marketable debt over the next three years. This means that most countries are focused on mitigating refinancing risk, maintaining flexibility in funding programmes, and broadening the investor base. In countries where financing requirements are limited and declining, sovereign debt managers face a “positive” set of challenges. For example, the minimal optimal size of outstanding sovereign debt required to maintain a vibrant government bond market and facilitate the implementation of monetary policy is currently under discussion in a few countries.
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