Central Bank Reserve Management Practices : Insights into Public Asset Management from the Second RAMP Survey
In the summer of 2019, the World Bank Treasury’s Reserve Advisory and Management Partnership (RAMP) conducted its second survey on central banks’ reserve management practices, with a particular focus on governance, accounting, and other operational practices. Understanding these practices is par...
| Main Author: | |
|---|---|
| Format: | Working Paper |
| Published: |
World Bank, Washington, DC
2020
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/294551588015858209/Central-Bank-Reserve-Management-Practices-Insights-into-Public-Asset-Management-from-the-Second-Ramp-Survey http://hdl.handle.net/10986/33657 |
| id |
okr-10986-33657 |
|---|---|
| recordtype |
oai_dc |
| spelling |
okr-10986-336572021-05-25T10:54:44Z Central Bank Reserve Management Practices : Insights into Public Asset Management from the Second RAMP Survey World Bank CENTRAL BANK BANK RESERVE RISK MANAGEMENT STRATEGIC ASSET ALLOCATION ACCOUNTING RESERVE MANAGEMENT POLICY FOREIGN EXCHANGE RESERVE INTERNATIONAL FINANCIAL REPORTING STANDARDS In the summer of 2019, the World Bank Treasury’s Reserve Advisory and Management Partnership (RAMP) conducted its second survey on central banks’ reserve management practices, with a particular focus on governance, accounting, and other operational practices. Understanding these practices is particularly relevant during the COVID-19 crisis, as central banks use their foreign currency reserves to help their countries deal with capital outflows and sharp decreases in exports, tourism, and remittances. On governance, the survey finds that the most common practice is that boards set the investment policy and guidelines, investment committees review the proposals to the board and monitor implementation, and operational units make day-to-day decisions and develop proposals for the board. Central banks have different organizational arrangements for their operational units. The survey results also show that most central banks are well-positioned to provide foreign currency liquidity during the coronavirus pandemic, as they continue to invest their reserves in high-quality fixed-income assets. At the same time, the gradual diversification to nontraditional asset classes continues. The allocation to emerging market bonds, corporate bonds, and mortgage-backed securities of central banks reserves increased slightly since the previous survey. The data show considerable cross-country differences in the way central banks manage their reserves, and in some circumstances, the analysis suggests these differences correlate with respondents’ country income groups and levels of reserve adequacy. Regarding accounting practices, two-thirds of central banks report some degree of implementation of International Financial Reporting Standards (IFRS). The survey also reveals multiple practices to distribute central bank net income to governments. However, data suggest that the transfers of profits between central banks and ministries of finance are not symmetrical—central banks are more likely to distribute profits than to receive financial support in case of losses. 2020-04-27T18:40:37Z 2020-04-27T18:40:37Z 2020-04-27 Working Paper http://documents.worldbank.org/curated/en/294551588015858209/Central-Bank-Reserve-Management-Practices-Insights-into-Public-Asset-Management-from-the-Second-Ramp-Survey http://hdl.handle.net/10986/33657 Development Knowledge and Learning; CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Working Paper |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| topic |
CENTRAL BANK BANK RESERVE RISK MANAGEMENT STRATEGIC ASSET ALLOCATION ACCOUNTING RESERVE MANAGEMENT POLICY FOREIGN EXCHANGE RESERVE INTERNATIONAL FINANCIAL REPORTING STANDARDS |
| spellingShingle |
CENTRAL BANK BANK RESERVE RISK MANAGEMENT STRATEGIC ASSET ALLOCATION ACCOUNTING RESERVE MANAGEMENT POLICY FOREIGN EXCHANGE RESERVE INTERNATIONAL FINANCIAL REPORTING STANDARDS World Bank Central Bank Reserve Management Practices : Insights into Public Asset Management from the Second RAMP Survey |
| relation |
Development Knowledge and Learning; |
| description |
In the summer of 2019, the World Bank Treasury’s Reserve Advisory and
Management Partnership (RAMP) conducted its second survey on central
banks’ reserve management practices, with a particular focus on
governance, accounting, and other operational practices. Understanding
these practices is particularly relevant during the COVID-19 crisis, as central
banks use their foreign currency reserves to help their countries deal with
capital outflows and sharp decreases in exports, tourism, and remittances.
On governance, the survey finds that the most common practice is that
boards set the investment policy and guidelines, investment committees
review the proposals to the board and monitor implementation, and
operational units make day-to-day decisions and develop proposals for the
board. Central banks have different organizational arrangements for their
operational units. The survey results also show that most central banks are
well-positioned to provide foreign currency liquidity during the coronavirus
pandemic, as they continue to invest their reserves in high-quality fixed-income
assets. At the same time, the gradual diversification to nontraditional
asset classes continues. The allocation to emerging market
bonds, corporate bonds, and mortgage-backed securities of central banks
reserves increased slightly since the previous survey. The data show
considerable cross-country differences in the way central banks manage
their reserves, and in some circumstances, the analysis suggests these
differences correlate with respondents’ country income groups and levels
of reserve adequacy. Regarding accounting practices, two-thirds of central
banks report some degree of implementation of International Financial
Reporting Standards (IFRS). The survey also reveals multiple practices to
distribute central bank net income to governments. However, data suggest
that the transfers of profits between central banks and ministries of finance
are not symmetrical—central banks are more likely to distribute profits than
to receive financial support in case of losses. |
| format |
Working Paper |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
Central Bank Reserve Management Practices : Insights into Public Asset Management from the Second RAMP Survey |
| title_short |
Central Bank Reserve Management Practices : Insights into Public Asset Management from the Second RAMP Survey |
| title_full |
Central Bank Reserve Management Practices : Insights into Public Asset Management from the Second RAMP Survey |
| title_fullStr |
Central Bank Reserve Management Practices : Insights into Public Asset Management from the Second RAMP Survey |
| title_full_unstemmed |
Central Bank Reserve Management Practices : Insights into Public Asset Management from the Second RAMP Survey |
| title_sort |
central bank reserve management practices : insights into public asset management from the second ramp survey |
| publisher |
World Bank, Washington, DC |
| publishDate |
2020 |
| url |
http://documents.worldbank.org/curated/en/294551588015858209/Central-Bank-Reserve-Management-Practices-Insights-into-Public-Asset-Management-from-the-Second-Ramp-Survey http://hdl.handle.net/10986/33657 |
| _version_ |
1764479237317722112 |