Paolo Angelini: Sovereign debt markets - post-pandemic developments and challenges

Welcome address by Mr Paolo Angelini, Deputy Governor of the Bank of Italy, at the 11th International Conference on Sovereign Bond Markets "Sovereign bond markets: sailing in calm and stormy waters", Venice, 10 June 2025.

The views expressed in this speech are those of the speaker and not the view of the BIS.

1. Introduction

Good afternoon and welcome to the 11th International Conference on Sovereign Bond Markets, a joint endeavor among central banks (Bank of Italy, Deutsche Bundesbank, Bank of Canada and the European Central Bank) and U.S. and European academic institutions.

Venice is a historically important venue for sovereign debt: the Republic of Venice was the first state to develop a sovereign debt market, in the late XIII century. Historical records show that most of the features of modern sovereign debt were designed here. At that time, just across the eponymous bridge, the island of Rialto was the commercial and financial heart of the city, where merchants met to exchange information about world developments and to conclude contracts. Venice's revenue largely came from indirect taxes, such as salt and customs duties. As military expenses grew, particularly for campaigns in the Italian mainland and naval conflicts to secure the Adriatic, the Republic resorted to a new financing source, namely compulsory financial investments by wealthy citizens.

To this end, the Venetians developed a financial instrument, "prestiti" (i.e. loans), which gave the (forced) purchaser a claim on the state and a right to interest. Such loans were a mere entry in the ledgers of the state loan office ("Camera degli Imprestiti"), so Venice invented not just sovereign bonds, but also dematerialization.