Written Testimony of Tom Wipf, Managing Director at UBS, serving as CEO of Credit Suisse US Entities, on behalf of the Securities Industry and Financial Markets Association (SIFMA)

Before the U.S. House of Representatives
Financial Services Committee

Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity

Hearing Entitled:
“U.S. Treasury Debt in the Monetary System”
April 8, 2025

Introduction

Chairman Lucas, Ranking Member Vargas and distinguished members of the Task Force, thank you for the opportunity to testify today on the U.S. Treasury market. My name is Tom Wipf. I am Managing Director at UBS, currently serving as the CEO of Credit Suisse Entities, responsible for the integration of the Credit Suisse acquisition in the U.S. I’m here today as a Board Member of the Securities Industry and Financial Markets Association. In relation to the topic of today’s hearing, from 2007 through 2019, I served as the Chair of The Treasury Market Practices Group (TMPG), a group sponsored by the Federal Reserve Bank of New York that focuses on the Integrity and efficiency of the Treasury Market, Agency Debt and Agency Mortgage Backed Securities. I also had the pleasure of testifying before this Committee in 2021 when I served as the Chair of the Alternative Reference Rate Committee (ARRC) a group of private-sector participants convened by the Fed to ensure a successful transition from LIBOR.

Treasury Market Overview

U.S. Treasuries are debt instruments issued by the U.S. government to finance its activities. Owing to the United States’ creditworthiness and status as the world’s leading economy, the U.S. Treasury market is the largest and most liquid bond market on the planet. Its smooth functioning is essential to: (1) achieving the lowest cost to taxpayers over time in connection with the financing of our debt, and (2) the overall efficient operation of the financial system and, more broadly, the world economy.

Since U.S. Treasuries are backed by the full faith and credit of the U.S. government, these securities are considered by market participants as the benchmark credit against which all other debt securities are compared. As a result, U.S. Treasury yields have an impact on the rates that consumers, businesses, and governments across the globe pay to borrow money. In addition, the U.S. Treasury repo market is a key transmission mechanism for U.S. monetary policy and is vital to the liquidity of the cash treasury market. Put simply, the Treasury markets are the bedrock of the global financial system.

The Treasury markets operate through a dealer-based structure with “primary dealers” – banks and broker-dealers that have been designated as counterparties of the Federal Reserve Bank of New York (FRBNY) – acting as the largest buyers of new Treasury debt and as market-makers or intermediaries in the secondary markets. Treasury securities are widely held and actively traded by public and private institutions including central banks, corporations, individuals, and institutional investors. Financial institutions, including banks, insurance companies, mutual funds, and pension funds, hold a third of Treasury securities¹

Growth of U.S. Treasury Market

The Treasury market has grown significantly in recent years. Notably, recent market episodes have raised concerns about the structural resilience of the Treasury market and the capacity of market participants to intermediate the trading of these instruments without disruption. Today, there are $28 trillion Treasury securities outstanding, more than double the total from 2016 ($13.9 trillion) and nearly quadruple the total from 2009 ($7.3 trillion).² This trend is likely to continue, as the Congressional Budget Office (CBO) estimates that outstanding debt is expected to hit $48 trillion by 2034.

In a similar fashion, Treasury issuance has also increased significantly in recent years. In the 10 years prior to COVID, Treasury issuance averaged just under $1 trillion in privately held net marketable securities per year. Even when you exclude issuance in 2020, which saw elevated Treasury issuance due to government programs to support the U.S. economy (roughly $4 trillion), Treasury issuance has remained significantly higher than the pre-covid average with $3.1 trillion issued in 2023 and $2.4 trillion issued in 2024. Current estimates for 2025 would follow a similar trend with an estimated $2.3 trillion in issuance.³

In sum, the Treasury securities market has experienced exponential growth in a relatively short period of time and is likely to continue growing in the coming years, underscoring the robust demand for, and importance of, these securities.

1. https://www.sifma.org/resources/research/statistics/us-treasury-securities-statistics/ [↩]
2. Id. [↩]
3. https://www.sifma.org/wp-content/uploads/2024/04/SIFMA-Insights-Fixed-Income-Market-Structure-Compendium_2-26.pdf [↩]