Government Paying Banks to Help Sell Gilts

You might have got the impression that the economy is turning. In reality the debt crisis is now in phase two and the government can’t easily find buyers for gilts.* In what is a rare shame for a triple-A rated nation, HM Treasury was forced this morning to ask banks for help selling the debt paper.  Barclays, Goldman Sachs, HSBC and RBS are looking for buyers of £5 billion of Gordon’s gilts round the market with generous yields being offered.   Not quite a buy-one-get-one-free offer.  Not yet anyway…

When Gordon set up the Debt Management Office it was supposed to handle gilt sales for the government. The tidal wave of government debt flooding the market has made that more difficult…

See also: S&P Downgrades UK Government Debt

*Full disclosure, Guido sold gilt futures before breakfast this morning.


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