Scottish Government bond plan: questioning the wholesale market approach
By
Professor Richard Murphy
Summary
The article argues that while the Scottish Government's plan to issue its first bond is a reasonable use of borrowing powers, the assumption that it should be sold through wholesale financial markets is misguided. The author contends that Scotland could pursue better alternatives than the conventional approach of selling bonds to institutional investors, questioning the stated aims of demonstrating credibility and winning investor confidence.
Source
bskyScottish Government bond plan: questioning the wholesale market approachthenational.scotKey quotes
· 4 pulledGovernments should borrow to fund investment, and Scotland should use the borrowing powers available to it.
My concern is with the assumption that it should be sold through the wholesale financial markets, because that is simply how governments are expected to borrow.
Scotland can do better than that.
The stated aims of this bond issue are to demonstrate that Scotland is a credible borrower and to win the confidence of institutional investors.
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