GPI 2019 special report: Risks in reserves

While public interest in central banks over the past decade has centred on their unconventional monetary policy, important shifts have been taking place with regard to their role as investors and reserves managers.

Global central bank reserves grew quickly at the start of the millennium, rising to around 8tn in 2008 from just over 2tn in 2000. They continued to rise steadily after the 2008 financial crisis to reach a peak of close to 14tn in 2014. This was followed by a slight and short-lived dip driven by the drawing down of reserves by the People’s Bank of China, and a subsequent recovery beginning in 2016. According to the latest data in this year’s Global Public Investor, central bank reserves stand at 13.5tn as of 2018, making them one of the largest public investor groups. For comparison, sovereign funds manage 8.7tn while public pension funds (almost three times as many institutions as central banks) manage 15.7tn.

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