Introduction
Published online by Cambridge University Press: 23 December 2009
Summary
Domestic and foreign financial assets of central banks and public wealth funds worldwide are estimated to have reached in 2007 more than USD 12 trillion, which is more than 15 per cent of world GDP, and more than 10 per cent of the global market capitalization of equity and fixed-income securities markets. Reflecting unprecedented growth of their financial assets, and the revolution of risk management techniques and best practices during the last fifteen years, the investment and risk management policies and procedures of central banks and other public investors have undergone a profound transformation. The purpose of this book is to provide a comprehensive and structured overview of issues and techniques in the area of public institutions' risk management. On each of the main areas of risk management, the book aims at first presenting the general problems as they also would occur in private financial institutions, then to discuss how these materialize in the special case of public institutions, and finally to illustrate this general discussion by describing the European Central Bank's (ECB) specific approach. Due consideration is given to the specificities of public institutions in general and central banks in particular. On the one side, their public character relates to certain policy tasks, which will also impact on their investment policies, in particular with regard to assets which are directly considered policy assets (e.g. monetary policy assets, foreign reserves to stand ready for intervention purposes).
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- Risk Management for Central Banks and Other Public Investors , pp. xx - xxviPublisher: Cambridge University PressPrint publication year: 2009