Government Bond

Glossary

Banking

Government Bond

Government bonds are securities sold by sovereign governments to supplement tax income. They can be sold at regular or ad hoc government auctions (through panels of primary dealers), or as syndicated bond issues (with an underwriting syndicate). Government securities are issued in multiple maturities from overnight (one-day) to 100 years and in standard fixed-income bond formats or as inflation-indexed securities. Government bonds are referred to as risk-free securities, which is technically not the case, but in the case of developed economies, they are invariably seen as the securities least likely to default.

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