räntebörser

A räntebörser, literally meaning "yield market" or "yield stock exchange", is a specific type of market where investors and traders buy and sell government bonds and other fixed income securities. This concept is primarily used in Scandinavian countries, particularly in Norway and Sweden.

In these markets, räntebörser operate independently from the spot markets for government bonds, with the primary focus on buying and selling bonds through the trade of titles, not physical securities. This indicates a specific swap of debt obligations, not the transfer of ownership of the bond itself.

Räntebörser function to facilitate the borrowing and lending of capital, which may seem counterintuitive at first glance. However, parties with higher interest rate expectations will generally participate in this market by short-selling the current interest rate yield back to a party that has a lower interest rate expectation, effectively causing them to "buy back" the already purchased paper. Conversely, parties expecting a higher interest rate will short-sell bonds to parties expecting a lower security yield.

Investors and traders engage in räntebörser for various reasons, with one primary goal being to evaluate interest rates that are about to mature versus those put in effect by the bond that is expanding.