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Maria Demertzis and David Pichler

Articles by Maria Demertzis and David Pichler

Whose (fiscal) debt is it anyway?

February 6, 2019

The authors map how much fiscal debt is in the hands of domestic and foreign holders in the euro area. While the market for debt was much more international prior to the crisis, this trend has since been reversed. At the same time, central banks have become important holders of fiscal debt.

Figure 1 depicts the evolution of euro-area general government debt and whether it is in domestic or foreign hands. The investor base varies significantly across countries, but we do observe general trends that inform our understanding in this respect.
Between 1995 and 2007, financial integration in the euro area led to a diversification of the investor base. The share of resident investors (and in particular domestic banks) dropped from 72% and 35% to 48% and 25% respectively, during a period in

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