Source: http://debtreview.treasury.gov.au/content/discussion/html/CCSMReview.asp
Timestamp: 2018-10-17 07:53:19
Document Index: 614262695

Matched Legal Cases: ['art 1', 'art 2', 'art 3', 'art 4', 'art 5', 'art 6', 'art 7', 'art 8', 'art 9', 'art 10', 'art 11', 'art 12', 'art 13', 'art 14', 'art 15', 'art 16', 'art 17', 'art 18', 'art 19', 'art 20', 'art 21', 'art 22', 'art 23', 'art 24', 'art 25', 'art 26', 'art 27', 'art 28', 'art 29', 'art 30', 'art 31', 'art 32', 'art 33', 'art 34', 'art 35', 'art 36', 'art 37', 'art 38', 'art 39', 'art 40', 'art 41', 'art 42', 'art 43']

ISBN 0 642 741662
The role of the Commonwealth Government Securities market 2
Appropriate size of the Commonwealth Government Securities market 6
Options available to the Commonwealth 7
Chapter 2: Overview of Australian financial markets 15
Australia's financial markets 15
Australia's debt markets 15
Commonwealth Government Securities 16
State and Territory government bonds 21
Corporate bonds 22
Debt issuance trends 23
Associated market infrastructure 25
Derivative markets 25
Clearing and settlement systems 28
Regulatory frameworks 29
Chapter 3: Role of the Commonwealth Government Securities market 31
Minimal credit risk 31
High levels of liquidity 32
Broad range of maturities 32
Well developed market infrastructure 33
Pricing other financial products 35
Key issues 35
Possible alternatives 36
Referencing other financial products 41
Key issues 41
Possible alternatives 41
Managing financial risk 43
Key issues 43
Possible alternatives 46
Providing a long-term investment vehicle 50
Key issues 50
Possible alternatives 52
Implementing monetary policy 54
Key issues 54
Possible alternatives 56
Providing a safe haven in times of financial instability 57
Key issues 57
Possible alternatives 60
Attracting foreign capital inflow 63
Key issues 63
Possible alternatives 65
Promoting Australia as a global financial centre 66
Key issues 66
Possible alternatives 68
Chapter 4: Appropriate size of the Commonwealth Government Securities market 69
Commonwealth Government Securities as a benchmark for pricing other debt securities and managing financial risk 69
Commonwealth Government Securities as a long-term investment vehicle and safe haven 71
Risk premium considerations 73
Chapter 5: Options available to the Commonwealth 75
Option 1: Wind down the Commonwealth Government Securities market 77
Risk and return issues 77
Economic impact 79
Governance issues 80
Budget impacts 80
Transition issues 81
Option 2: Consolidate Commonwealth and State government debt markets 83
Risk and return issues 83
Economic impact 84
Governance issues 84
Budget impacts 85
Transition issues 86
Option 3: Maintain the Commonwealth Government Securities market and fund the Commonwealth's unfunded superannuation liabilities 87
Risk and return issues 89
Economic impact 94
Governance issues 97
Budget impacts 101
Transition issues 104
Appendix 1: Summary of key questions 105
Appendix 2: Description of risks in debt and asset management 109
Appendix 3: Macroeconomic implications 111
Economic framework 111
The demand for Commonwealth Government Securities 113
The supply of Commonwealth Government Securities 115
Supply and demand of alternative investments 115
Determination of domestic output and the current account 115
Implications of a diminishing Commonwealth Government Securities market 117
Global bond index argument 121
Extreme illiquidity in the Commonwealth Government Securities market 122
Implications of maintaining the Commonwealth Government Securities market 123
Government investment in domestic assets 124
Government investment in foreign assets 125
Longer-term stability issues 128
Appendix 4: Selected international experience 133
Government debt markets 133
Republic of Korea 140
Managing Government asset portfolios 142
Appendix 5: Decision on consolidating Commonwealth and State debt markets 151
Table 1: Commonwealth Government Securities outstanding 17
Table 2: Correlation of changes in interest rate swap rate with other debt security yields 47
Table 3: Holdings of Commonwealth Government Securities by sector 51
Chart 1: Commonwealth general government net debt 11
Chart 2: Fixed coupon bonds outstanding by issuer type (June 2002) 16
Chart 3: Benchmark Treasury Fixed Coupon Bonds outstanding (June 2002) 18
Chart 4: Treasury Indexed Bonds outstanding (June 2002) 19
Chart 5: Net short-term assets and Treasury Notes outstanding in 2001 20
Chart 6: State and Territory bonds outstanding (June 2002) 21
Chart 7: Corporate bonds outstanding by issuer 22
Chart 8: Maturity profile of corporate fixed coupon bonds outstanding (June 2002) 23
Chart 9: History of outstanding bonds 24
Chart 10: Turnover in Australian fixed coupon debt markets 25
Chart 11: Turnover of Treasury bonds and Treasury bond futures contracts 26
Chart 12: Turnover of Treasury bonds and interest rate swaps 27
Chart 13: Turnover in the repurchase market by instrument 28
Chart 14: Commonwealth Government Securities yield curve (June 2002) 33
Chart 15: Outstandings and turnover in the Australian corporate debt market 37
Chart 16: The interest rate swap curve (June 2002) 38
Chart 17: Spread of corporate bonds to Treasury bonds 58
Chart 18: US corporate-government bond spread and Dow Jones Index 59
Chart 19: Australia's current account balance 63
Chart 20: Commonwealth Government Securities outstanding if retired at maturity and no further issuance 70
Chart 21: Growing the Commonwealth Government Securities market in line with nominal growth in gross domestic product 71
Chart 22: Growing the Commonwealth Government Securities market in line with growth in financial assets 72
Chart 23: Australian financial asset market size (June 2002) 91
Chart 24: Size of Government investment possible with investment limits 92
Chart 25: Demand for CGS 114
Chart 26: IS-AMP-BP Framework 117
Chart 27: Reduced supply of CGS 118
Chart 28: Effect of reduced CGS supply in the IS-AMP-BP model 120
Chart 29: CGS demand with global bond index investors 122
Chart 30: Extreme illiquidity and reduced CGS supply 123
Chart 31: Investment of budget surpluses in domestic financial assets 124
Chart 32: Increased CGS supply and foreign investment of proceeds 126
Chart 33: Effect of increased CGS supply in the IS-AMP-BP model when government invests in foreign assets 127
Chart 34: Ongoing budget surpluses 129
Chart 35: Ongoing budget deficits 130
Chart 36: Singapore Government securities on issue 133
Chart 37: Hong Kong Government securities on issue 135
Chart 38: US government, corporate and agency securities on issue 138
Chart 39: Korean government and corporate securities on issue 140
Chart 40: New Zealand Government asset portfolios: 2002 to 2006 142
Chart 41: Accumulated assets in the Government Petroleum Fund 145
Chart 42: Canadian Pension Plan asset holdings 147
Chart 43: Accumulated assets in National Pensions Reserve Fund 149