Asset Management at Central Banks and Monetary Authorities

In response to the Global Financial Crisis and the COVID-19 pandemic, central banks have used all available instruments in their monetary policy tool-kit to avoid financial market disruptions and a collapse in real economic activities. These actions have expanded the size of their balance sheets and altered the composition of the asset-side. This edited book highlights how these assets are managed, providing an intellectual and practical contribution to an under-researched field of central bank responsibilities. It first reviews the sources and uses of domestic and international assets and how they complement--or possibly conflict with--the implementation of monetary policy goals. Next, the book examines the asset management mandate in a balance sheet context before turning to the investment decision-making process from strategic and tactical asset allocation to investment strategies, risk management, governance, reporting and control. Finally, it presents new developments in the field of managing assets at central banks. The individual chapters are written by central bankers, academics, and representatives from International Financial Institutions, each representing a particular aspect of the asset management practice. --Peter R. Fisher, Clinical Professor, Tuck School of Business at Dartmouth --Guy Debelle, Deputy Governor, Reserve Bank of Australia --Kjell G. Nyborg, Chaired Professor of Finance, University of Zurich, Author of Collateral Frameworks: The Open Secret of Central Banks --William White, Senior Fellow at the C.D. Howe Institute, former Head of the Monetary and Economic Department with the Bank for International Settlements (BIS) and chairman of the Economic and Development Review Committee at the OECD --Tom A. Fearnley, Investment Director, Norwegian Ministry of Finance --Eric Bouyé, Head of Asset Allocation and Quantitative Strategies, Treasury Department, The World Bank --Heidi Elmér, Director of Markets Department, Severiges Riksbank --Eli Remolona, Professor of Finance and Director of Central Banking, Asia School of Business in collaboration with MIT Sloan --Louis de Montpellier, Former Global Head, Official Institutions Group, SSGA, and former Deputy Head, Banking Department, Bank for International Settlements (BIS), Basel --Jean-Pierre Matt, Former Head of Financial Analysis at the Bank for International Settlements (BIS) and founder of Quanteis --Leon Myburgh, Former Head Financial Markets Department, South African Reserve Bank (SARB), Pretoria --Freyr Hermannsson, Former Head of Treasury, Central Bank of Iceland, Reykjavík