November 2011

Now European countries are discussing joint issuance of government bonds. But Germany, needless to say the most financially stabilized country, is against the proposition partly because Germany can issue its government bond for itself at less expensive cost. This is quite a similar situation seen in Japanese local government bond market. In 2003, 27 major prefectures and cities started joint issuance of their local government bonds. In terms of relationship with bond holders, the issuing local governments are jointly and severally liable for the entire amount of the jointly issued bond. This makes redemption of the bond more reliable, even though none of those local governments have ever defaulted on… Read More »Joint Local Government Bond in Japan