In 2008 government debt management (for the part represented by tradable government securities) has been significantly affected by the stream of events that have further amplified instability throughout all sectors of the international financial system, starting from the money and interbank market and ending with the fixed income and equity markets. From the month of September the general picture has become even more critical due to the consequences stemming from the patrimonial and financial crisis of several fixed income players (such as investment banks, commercial banks, insurance companies, hedge funds, mutual funds and so on) that, in some cases, led to a bankruptcy status, and in some other, to bailouts organized by government and central banks according to different schemes. Government securities have been severely involved in the crisis not only because they become the main focus for many investors needing to rebalance their portfolios with respect to non-performing assets, such as shares or structured products, but also because the crisis itself has deeply reshaped and it is still reshaping the composition by typology of players operating on this market and the way this market works.
In pursuing its goal of providing the financing for the State Sector Borrowing Requirement, the Italian Treasury had to address the financial markets new environment in order to continue to provide satisfactory efficiency levels in terms of cost and risks of the funding activity, preserving at the same time full transparency and predictability of its issuance decisions, in a contest of continuous and strict dialogue with market participants.
Differently from previous years, this year the “Guidelines” have been split in two parts: the first part, the present document, is focused on the issuance strategy for 2009; the second one will instead be devoted to a synthetic and analytical account of the debt management activity carried out during 2008 and it will be released in January 2009. This choice is essentially due to the need to have more time to go through and describe what happened in 2008, given the uniqueness of that year, without having investors and market participants waiting too long to know the main guidelines of the Treasury debt strategy for next year.