have also flagged costs related to ageing as a key risk to debt sustainability.
"These long-term risks may not possess a well-established historical precedent, making reliance solely on historical data for risk assessment a challenge," said Gael Fichan, head of fixed income at Swiss private bank Syz Group. However, as central banks now roll off that debt and government financing needs rise, that should reverse, investors say. A recent rise in long-dated bond yields in reaction to a surge in U.S. borrowing needs was a case in point.
Kraemer, the former S&P official, said it was "unreasonable" that shorter and longer-term government debt were rated the same.Policy "is going to matter more especially in terms of the fiscal side of things about how the governments are reacting to the various promises to the electorate and what they're trying to achieve," said Kshitij Sinha, a fund manager at Canada Life Asset Management.