In-depth introduction: Bonds

Interplay between rules could reshape demand for government debt

Being a government bond right now would be stressful. There are lots of them around, all jostling for attention, but rules that could play a big part in governing demand and liquidity are up in the air.

A whistle-stop tour of these changes might start with the leverage ratio, which sets capital as a function of a portfolio's size, rather than its risk – not good for huge government bond books – and also limits the power of collateral that is posted in bond form. These provisions clearly inhibit