Financial Repression Tracker

Rules that steer savings into government debt or hold returns below inflation, country by country.

Hold · Central bank financing

Central bank as residual buyer of government debt

What it is
A standing obligation or backstop makes the central bank absorb government securities that private bidders will not buy on the offered terms.
Why it counts
The Treasury can resist market-clearing yields because undersubscription is met by central-bank financing.

When it was in force

  • Italy: 1975 → 1981, historical
  • Indonesia: 2020, historical; its end is not documented

2 examples

  1. Italy

    1975 → 1981Historical

    As cited: 1975-July 1981

    The Bank of Italy bought the portion of government issues not placed with the public before the Treasury–central-bank divorce.

    Treasury-bill auction arrangements introduced in 1975; terminated through the 1981 Andreatta–Ciampi exchange of lettersSecondary source
    “la Banca d'Italia sottoscrive a fermo titoli di Stato o acquista residualmente la parte non collocata presso il pubblico.”

    bancaditalia.it (opens in a new tab)Checked: quote matched on the page by script

    Italy today: index 49.2

  2. Indonesia

    2020Historical

    Its end is not documented · As cited: 2020 (emergency auction framework)

    Bank Indonesia could place noncompetitive primary-market bids as buyer of last resort when market absorption failed or yields rose sharply.

    Board of Governors Regulation No. 22/5/PADG/2020 implementing Government Regulation in Lieu of Law No. 1 of 2020Primary source
    “Bank Indonesia is a last resort if the market capacity is unable to purchase them”

    bi.go.id (opens in a new tab)Checked: quote matched on the page by script

Examples and their dates reviewed .

Further reading

7 more on central bank financing