Reserves
IMF paper scrutinises ‘procyclicality’ in reserve management
Over half of central bank reserve managers surveyed by IMF say they would alter practices to reduce procyclicality; paper questions reliance on credit rating agencies
Italians back using gold reserves to lower funding costs
A survey commissioned by the World Gold Council finds that Italians would support the creation of gold-backed bonds; sovereign bond yields fall further as new government is formed
Central bankers back equity investment for reserves
Almost two-thirds of respondents to CentralBanking.com poll believe central banks should invest some of their reserves in equities; most say investment should be kept below 10% of portfolio
SNB's Jordan slams gold referendum
Thomas Jordan says limiting Swiss National Bank's control over gold reserves would be ‘detrimental to Switzerland'; reveals location of holdings in face of public pressure
Australia to shift 5% of foreign reserves to China
Deputy governor Philip Lowe reveals the Reserve Bank of Australia will invest around 5% of its foreign exchange reserves in China; Asian economists divided over significance of move
IMF publishes new reserve management guidelines
New additions encourage portfolio diversification, greater consideration of an investment's impact on the markets and internal credit rating assessments
Bank of Israel director says central banks can 'overdo' liquidity
Andrew Abir identifies difficulty in providing the right amount of liquidity; says the risk of impairing market function was one worth taking
Draghi enters fray to defend Cyprus central bank independence
ECB president warns Cyprus government against violating the central bank’s independence by dismissing its governor; says any gold sales should benefit the central bank ‘first and foremost’
CNB board member issues warning on common bank resolution
Lubomir Lízal says common bank resolution most worrying element of European banking union; renminbi too politicised to use as reserve currency
Central banks weigh use of OTC clearing houses
Survey finds nearly 40% of central banks are considering clearing their OTC derivatives
Accumulating reserves to guard against inflation is 'misplaced'
Researchers at Bofit institute find that using reserves as a ‘bulwark against goods price inflation' is a mistake; say best protection against costly reserves accumulation is flexible exchange rate
Reserve managers expanding into riskier assets, survey finds
Latest Reserve Management Trends reveal central banks are moving into ‘non-traditional' currencies; growing number of reserve managers investing, or considering investing, in equities
Turkish banks face larger bill for holding forex and gold
Central bank increases price of holding gold and foreign exchange for Turkish banks who want to diversify reserve holdings away from Turkish lira
China uses Brics summit to further RMB internationalisation
South Africa and Brazil sign deals with PBoC to 'strengthen economic relations' between Brics nations
Swiss National Bank faces referendum over gold sales
Politicians seek to prevent SNB from selling gold and force the central bank to hold 20% of assets in the precious metal via a public referendum
Fed pays $88bn in profits to US Treasury
Federal Reserve makes large profit on securities holdings in 2012; follows warnings from Ben Bernanke and Fed researchers that remittances are not likely to remain elevated
IMF paper says competition is a motive for forex intervention by emerging markets
Study examines activity of emerging market economies in foreign exchange markets; finds competitiveness can be a motivating factor
Nalm 2013: Sound central bank risk practices could choke off liquidity
Central banks are more activist in reserves management, with some looking to private sector for inspiration. But there are dangers with such a approach, say panellists at Central Banking conference
Nalm 2013: Bank of Israel’s Abir challenges credit risk assumptions in reserve management
Head of market operations Andrew Abir asks how bonds and equities can be consolidated under one reserve management framework; insists credit rating agencies remain valuable
Nalm 2013: Delegates debate reigniting European ABS market
Participants at Central Banking event discuss mechanisms to get European financial markets off life support; particular focus on asset-backed securities
Nalm 2013: National Bank of Austria analyst sets out currency diversification strategy
Portfolio analyst details models and analysis used to determine National Bank of Austria’s currency portfolio; shows diversification gives better risk/return
Nalm 2013: Debate rages over how to manage expanding reserves
Central banks enter into new asset classes and alternative currencies but Bank of Israel’s Andrew Abir rejects value of renminbi as a reserve currency
Gold should dominate RMB in central bank reserves, says WGC
World Gold Council encourages central banks – particularly in emerging market economies – to diversify into gold ahead of RMB and other ‘alternative’ currencies
Central Bank of Kenya denies seeking to strengthen currency
Kenyan shilling appreciates in run-up to elections; central bank says it only intervenes in exchange rate to support price stability