What is 'Madrid Fixed Income Market .MF '

Madrid fixed income market .MF represents the market that is used for trading Spain's public debt and other securities. Entities that trade Spain’s public debt include the nation’s central government, a number of regional governments as well as some public-sector organizations.

BREAKING DOWN 'Madrid Fixed Income Market .MF '

Madrid fixed income market .MF is part of the Madrid Stock Exchange, which is the largest securities market in Spain and one of the four members of the Bolsas y Mercados Españoles (BME), an organization that’s designed to streamline Spain's four major securities exchanges; Madrid, Valencia, Barcelona and Bilbao. BME is the operator of all the equity markets and financial systems in Spain, and the company has been listed since 2006.

In 1988, Spain's incorporation into the European Monetary System (EMS) transformed the Spanish Stock Exchange. The EMS was developed as an attempt to stabilize inflation and stop large exchange-rate fluctuations between European countries. In June 1998, the European Central Bank (ECB) was established and, in January 1999, a unified currency, the euro, was born and came to be used by most member countries of the European Union.

In 1993, the Madrid Stock Exchange switched to all-electronic trading for fixed-income securities. In 1999, Spain's securities markets began trading in euros. Its regulatory body is the Spanish Stock Exchange Commission.

Public Debt in Spain

The term public debt generally refers to the amount of total outstanding debt that has been issued by a country’s central government. It is also commonly referred to as sovereign debt. Public debt is often used by a nation to finance past deficits or to fund public development projects. The total amount of a government’s public debt obligations is often expressed as a percentage of gross domestic product (GDP). In credit analysis, a country’s public-debt-to-GDP ratio is often used as a gauge of its ability to repay its debt. Typically, the more indebted a country is, the greater the risk it may be unable to settle its obligations. A country that is unable to pay its debt usually defaults, which could cause a financial panic in the domestic and international markets.

As of June 2018, the Bank of Spain reported that the government’s public debt was equivalent to nearly 98 percent of the country’s GDP. That number falls well above the average of 87 percent for the Euro Area overall in 2017. However, economists have not agreed to a specific debt-to-GDP ratio as being ideal, and instead typically focus on the sustainability of certain debt levels. If a country can continue to pay interest on its debt without refinancing or harming economic growth, it is generally considered to be stable. It’s worth noting, however, that the ECB is ending its quantitative easing program and could potentially start to raise interest rates before 2018 is over. This would likely be an unfavorable development for countries in the region that already have high public debt burdens.

  1. Bilbao Stock Exchange

    The Bilbao Stock Exchange is one of the four major stock exchanges ...
  2. Barcelona Stock Exchange

    The Barcelona Stock Exchange is one of Spain's four major securities ...
  3. Madrid SE CATS (MSE) .MC

    Madrid SE CATS (MSE) .MC was the Computer Assisted Trading System ...
  4. Sovereign Debt

    Sovereign debt is issued by the national government in a foreign ...
  5. Bureau Of Public Debt

    The Bureau of Public Debt was an agency within the United States ...
  6. European Sovereign Debt Crisis

    The European debt crisis refers to the struggle faced by eurozone ...
Related Articles
  1. Personal Finance

    Spain's Economics: 3 Troubling Similarities to Greece

    Discover why the Spanish economy continues to suffer from devastating unemployment figures, and why a serious approach to growth and debt problems is needed.
  2. Insights

    How Countries Deal With Debt

    For many emerging economies, issuing sovereign debt is the only way to raise funds, but things can go sour quickly.
  3. Insights

    What the National Debt Means to You

    The U.S. deficit seems to grow every year. But how does national debt actually affect you?
  4. Investing

    Why Spain's Sovereign Debt Is Outshining Italy's

    Spanish 10-year government bonds have been trading at a lower yield than Italy, which has significantly larger economy
  5. Investing

    What Happened At MF Global?

    The story of MF Global is a telling example of a collapse with unfortunate ongoing consequences.
  6. Insights

    How Debt Limits A Country's Options

    While debt is fundamentally necessary to the operation of a national government, it can also be limiting and dangerous.
  7. Investing

    Will Corporate Debt Drag Your Stock Down?

    Corporate debt can mean a leg up for firms, or the boot for investors. How to tell the difference.
  8. Investing

    Why Governments Issue Foreign Bonds

    Government bonds issued in foreign currency have drawn a growing amount of interest in recent years. This article explores why governments, particularly those in emerging markets, choose to denominate ...
  9. Investing

    What's a Debt Security?

    A debt security is a financial instrument issued by a company (usually a publicly traded corporation) and sold to an investor.
  1. Why would you look at a company's net debt rather than its gross debt?

    Learn the difference between net debt and gross debt, how to calculate debt using a company's financial statements and why ... Read Answer >>
  2. What are the typical day-to-day responsibilities of a Chief Operating Officer (COO)?

    Learn how a country's debt crisis affects the world, including how currency values, inflation and output are affected on ... Read Answer >>
  3. Why would a company use a form of long-term debt to capitalize operations versus ...

    Learn about the different consequences of using long-term debt versus equity to raise capital for business activity, and ... Read Answer >>
  4. Is debt a relatively cheaper form of finance than equity?

    When financing a company, the cost of obtaining capital comes through debt or equity. Find out which method generally provides ... Read Answer >>
Trading Center