The Retail Market for Government Debt

Governments may be interested to develop the retail market for government debt for a number of reasons - for example, to broaden the investor base for public sector funding, to encourage the habit of saving among the population, or to stimulate the development of financial instruments and markets more generally. There are two main avenues for such retail funding. One is to sell to retail investors those marketable securities which are predominantly bought by wholesale investors. The other is to design non-marketable securities which are specifically targeted at, and possibly limited to, individuals and households. This Handbook discusses the way in which the needs of retail investors may differ from those of wholesale investors, and the particular attributes which may therefore attach to retail instruments, or to procedures for retail investment, in order to attract the small investor. The logistics of selling securities to a potentially large number of small investors are examined. Questions of taxation, marketing and regulation are also briefly reviewed. The experience of different countries, notably the United Kingdom but also some in central and eastern Europe, is drawn upon. This handbook is also available in Russian and Spanish.