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Debt, Sovereign

Sovereign debt is debt issued by the central government of a nation. It contrasts with other kinds of debt that can be distinguished by the various classes of borrowers, such as consumer and personal debt, corporate debt, and nonsovereign governmental debt. This last category is often broadly termed municipal debt and embraces the debt issued by subnational governments such as cities, state governments, and various agencies such as water districts and school boards.

In the United States, sovereign debt primarily takes the form of U.S. Treasury bills (or T-bills), notes, and bonds. Other nations with large economies issue debt as well. The major sovereign debt instrument of Germany is known as the “bund,” while the United Kingdom issues “gilts.” Each of these countries issues debt ...

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