Section B – The Financial Framework - Government Accounting

B3 – Government Borrowing
6. The chief source of Government borrowing is through the sale
of Government bonds on the Stock Exchange. The NTMA
normally creates bonds, in the form of new issues or additional
tranches of existing bonds, with short, medium and long
maturities. Sales of such Government bonds normally take
place through primary dealers, who make a market for them by
offering continuous bid and offer prices on designated bonds.
7. Government bonds are traded on the Dublin Stock Exchange.
Most of this activity takes place in the so-called ‘secondary’
market for bonds, where investors trade with each other via
brokers and the primary dealers (market makers), as opposed to
buying from or selling to the NTMA (the ‘primary’ market).
8. Government bonds in the main are purchased by banks,
insurance companies, pension funds and other financial
institutions, both resident and non-resident, as well as by nonfinancial
companies and private individuals. The Central Bank
keeps a register of all holders of Government bonds.
9. The NTMA also issues Exchequer Notes and Section 69 Notes
on the domestic market (under Section 69 of Finance Act,
1985). These are short-term debt instruments with a maturity of
between one week and one year. Exchequer Notes may be
purchased directly from the NTMA in amounts of €250,000 or
more by any person, company or institution, subject to NTMA
approval. Section 69 Notes may also be purchased direct from
the NTMA, or through any of the major banks in Ireland, but
they may only be purchased by qualifying foreign-owned
companies. The NTMA keeps registers of all holders of
Exchequer Notes and Section 69 Notes.
10.The other main sources of domestic borrowing include the
various Government small savings schemes operated by the
NTMA (Savings Bonds and Certificates, National Instalment
Savings and Prize Bonds). These provide an investment
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