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The case for GDP-linked securities

Advantages of GDP-linked securities: •For sovereign issuers: purchase insurance against economic downturn and loss of market access. •For corporate issuers: better align debt with payment capacity. •For investors in advanced economies: avoid insolvency from locking in negative real yields by gaining upside if growth recovers. •For central banks: avoid fiscal dominance by regaining the ability to raise interest rates without bankrupting sovereigns. […]