Federal bonds

In Germany, bonds issued by the Federal Government as well as those of its special funds. The securities have standardized interest and principal maturities (on January 4 and July 4, respectively) and a term of ten to thirty years. Depending on the issue date, bonds may have a short (less than one year) or long (more than one year) first coupon. – In terms of their conditions, federal bonds are an important benchmark for the market as a whole. To date, the ten-year Bund has served as a benchmark for both the German and the European bond markets. – Since March 2006, the federal government has also been issuing bonds linked to the consumer price index in the euro area, popularly known as “inflation bonds”; around five percent of the federal government’s borrowing is to be gradually covered by such securities. Previously, Italy and France had already issued such securities. – Pursuant to § 36 BörsG, federal bonds are automatically admitted to the official trading segment of every German stock exchange and, pursuant to § 52 BörsG, also to the regulated market. – See Bobl future, futures, interest rate swap. – Cf. Monthly Report of the Deutsche Bundesbank of October 2006, pp. 31 et seq. (p. 33: overview of bid-ask spreads of German Bunds since 1991), Monthly Report of the Deutsche Bundesbank of July 2008, p. 41 (only two percent of trading in Bunds took place on stock exchanges in 2006):

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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