What, for example, happens in the entirely plausible scenario that Mr Livingstone is elected as mayor urging that the tube modernisation be funded by a bondissue, while the government continues to advocate partial privatisation?
Even if its net debt were zero, a government could still foster a liquid bond market by continuing to issue bonds and investing the proceeds in domestic or foreign private-sector assets.
The offering coupon on the bond, which is the yield the government agreed to pay on the debt when it registered the issue with the market, was 4.875% before high demand brought the yield to its lowest ever.