NALM Americas 2013: Central banks should take more credit risk, says Flar CRO

Central banks will be unable to preserve the value of foreign reserves in real terms if they continue with traditional asset allocation strategies – and could see significant losses if interest rates rise, according to Juan Carlos Alfaro, chief risk officer at the Latin American Reserves Fund (Flar).

Speaking at the National Asset-Liability Management seminar in São Paulo this morning, Alfaro said central banks need to rethink their traditional preference to invest in short-duration AAA and AA-r

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