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Capital Markets: Plugging The Holes In The Sovereign Balance Sheet - Government Debt Managers Have Become Renowned For Their Clever Financial Gimmicks But Is The End To What Some Commentators Dub 'Fiscal Massaging' In Sight? Geraldine Lambe Investigates.

No longer dull, back-room bureaucrats, government debt managers have come out of the dark in the past decade, becoming synonymous with innovation and fancy financial footwork. Securitisations, derivatives, one-shot asset sales, delayed payments, shifting paydays and delayed tax refunds are now everyday tools of the trade in government balance sheet management. But do tighter scrutiny and shrinking asset pools spell the end of the affair with financial gimmickry?

Creative debt management is being driven by overarching political objectives as well as the need to fix gaping holes in domestic balance sheets. In Europe, strategies have been shaped by monetary union and the need ...

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