Asia-Pacific
Most central banks will not alter diversification due to high inflation
Over 63% of central banks do not plan changes, almost 27% are discussing modifications, and close to 10% have already implemented them or plan to do it
Boards remain key body in benchmarking approval
In almost 60% of central banks the board makes final decision, investment committee in 29%
More central banks engage in gold lending and swaps
Securities lending is more common among central banks from high income jurisdictions
Over 18% of central banks adopted new reserves assets last year
Middle income jurisdictions led the trend, 28.6% diversified their asset allocation
Managing risk with ETFs
Central Banking speaks to eight reserve managers about their thoughts on the use of ETFs, faced with market volatility, uncertainty and escalating inflation
Emerging markets central banks maintain lead in portfolio tranching
European institutions are less likely to implement this strategy
Banknotes: July to September 2022
A round-up of news and salient issues that have affected central bankers in the past three months
Case for retail CBDC ‘not compelling’ in Singapore – Menon
But MAS is building CBDC and sees some “promising use cases” for digital assets
Most central banks carry out frequent stress tests
All banks that carry out stress tests say they have improved financial stability
Cyber attacks on financial market infrastructure are rising
Two-thirds report recent increase in attacks, but 80% report good cross-border arrangements
Over half of central banks say AML risks are rising
But most say central banks co-operate sufficiently across borders against money laundering
Crypto assets may threaten Asian stability, IMF officials warn
Rising correlation between crypto and equity markets poses financial stability risk, say economists
Central banks rarely lead AML/CFT efforts
Most institutions do not want more AML/CFT powers
Earnings in upper-middle income economies outstrip high income peers
Financial stability staffing tends to match jurisdiction’s income level
Most central banks lack primary oversight of NBFIs
Many institutions capable of regulating non-banks, but just a few solely exercise such powers
A quarter of central banks have insufficient financial stability powers
Some respondent institutions need new powers urgently
Middle income countries more likely to report rising NPL levels
Most high income respondents say NPL levels have fallen in last five years
Banking resolutions are rare events in most countries
Two jurisdictions account for 77.9% of resolutions reported by sample
The PBoC, real estate debt and financial stability in China
Central bank policy-makers are restricted in terms of capacity and space by their efforts to manage the nation’s property bubble amid declining growth
Reserve requirements most commonly used macro-pru tool
Responses show differences in measures favoured by high and middle income economies
Most central banks do not want more macro-pru powers
But minority of benchmark participants want governments to adopt measures in use elsewhere
Central banks rarely administer deposit guarantee schemes
Lower-middle income countries less likely to have such schemes