The Bank for International Settlements (BIS) published a BIS Quarterly Review article explaining how its debt securities statistics can be used to assess the size, structure and potential vulnerabilities of bond market financing. Using these data, it finds that debt financing has shifted from loans to bonds since the 2008–09 Great Financial Crisis, with global debt securities outstanding topping USD 150 trillion and exceeding 135% of global GDP by end-2024, and bonds accounting for 40% of total credit to non-financial borrowers globally by end-March 2025. Government issuance is presented as the main driver of market expansion: since 2020, governments have accounted for more than half of outstanding debt securities, with government bonds rising from around 65% of global GDP in 2009 to over 80% by end-March 2025 and reaching 52% of global total debt securities. While around 93% of all bonds globally are denominated in the borrower’s domestic currency, governments increasingly rely on domestic currency issuance, whereas private sector borrowers continue to issue sizeable amounts in foreign currency, mainly US dollars. As of end-June 2025, 63% of foreign currency bonds outstanding were denominated in US dollars, up 20 percentage points since end-2007, alongside an expansion in the range of currencies used in international bond markets from about 50 at the time of the GFC to 75 by 2025. The article highlights challenges in monitoring risks as bond market development shifts currency and duration exposures toward investors, including the potential for mark-to-market losses to trigger selling or ex post hedging and limited information on hedging by non-bank financial institutions and non-financial corporations. It also notes that coverage is reasonably complete for offshore issuance in international markets and domestic issuance in major economies, but is less comprehensive for smaller economies and more limited for holdings data than for issuance.

Original source View in tracker