What central banks do with their dollars

ARTICLE - The events of September 11 reversed a 25-year trend of central bank reserve managers accepting greater risk in their portfolios, argues a paper in the latest BIS quarterly review.

Analysing the changes in dollar holdings, which represent more than 58% of official portfolios in March 2000, the authors distil three trends. Firstly, central banks began diversifying short-term holdings away treasury bills in the mid-1970s. Secondly, in 1990s there was a move away from treasurys as long-t