Financial Implications of the Shrinking Supply of U.S. Treasury Securities

52 Pages Posted: 18 Aug 2001

See all articles by Garry J. Schinasi

Garry J. Schinasi

Independent Advisor, Global Financial Stability

Charles Kramer

International Monetary Fund (IMF) - Capital Markets and Financial Studies Research Department

R. Todd Smith

University of Alberta

Multiple version iconThere are 2 versions of this paper

Date Written: May 2001

Abstract

Recent improvements in fiscal positions in advanced countries have sharply curtailed the issuance of government securities and created the possibility that government securities could disappear in some countries. The possibility that this might occur in the United States has attracted the most attention, in large part because of the international role of the U.S. dollar and the widespread perception that U.S. treasury securities have the lowest total financial risk (the combination of credit, market, and liquidity risks) among U.S. dollar assets. This paper analyzes the unique features of government securities and links them to the important roles that government securities, in particular U.S. treasury securities, have come to play in national and international financial markets. The paper then identifies and examines financial market-oriented public policy questions raised by the shrinking supply of U.S. treasuries.

Keywords: U.S. treasury securities, financial markets, public debt

JEL Classification: E44, E62

Suggested Citation

Schinasi, Garry J. and Kramer, Charles F. and Smith, Richard Todd, Financial Implications of the Shrinking Supply of U.S. Treasury Securities (May 2001). IMF Working Paper No. 01/61. Available at SSRN: https://ssrn.com/abstract=280299 or http://dx.doi.org/10.2139/ssrn.280299

Garry J. Schinasi

Independent Advisor, Global Financial Stability ( email )

Washington, 20008
+1-202-361-0958 (Phone)

Charles F. Kramer (Contact Author)

International Monetary Fund (IMF) - Capital Markets and Financial Studies Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6348 (Phone)
202-623-6339 (Fax)

Richard Todd Smith

University of Alberta ( email )

8-14 Tory Building
Edmonton, Alberta T6G 2H4
Canada
403-492-7898 (Phone)
403-492-3300 (Fax)

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