In the case of a rise in nominal long-term interest rates, even when a central bank increases its purchases of government bonds, or otherwise is put under pressure to increase such purchases, in order to suppress the government’s borrowing costs, the premiums might possibly rise if it is judged by market participants that the central bank’s purchases will weaken fiscal discipline.
I I am pleased to contribute to this conference on the Year 2000 and how the millennium date change poses a very significant risk for financial institutions and markets. The media have now been reporting regularly, and sometimes with flashy headlines, on the many problems which the Y2K problem or “millennium bug” can pose to the economy and public administration.