Financial Dictionary - Government bonds

Public debt is a type of debt issue performed by States or public administrations to fund their activities.

In Spain, for example, it encompasses all the debt of the central State, the 17 autonomous regions and local administrations.

When a State declares a public deficit, the main cause of this is that it has spent more than it has generated and, therefore, it needs to find a source of external funding, issuing public debt securities to this end.

The best-known public debt products include bonds, Treasury bills and repos.