Green Bonds: The Reserve Management Perspective
15 Pages Posted: 14 Oct 2019
Date Written: September 22, 2019
Central banks' frameworks for managing foreign exchange reserves have traditionally balanced a triad of objectives: liquidity, safety and return. Pursuing these objectives involves explicit trade-offs. Recently central banks have shown interest in incorporating environmental sustainability objectives into their reserve management frameworks. Rather than a triad, central banks may analyse (and weigh) a tetrad of reserve management objectives in allocating part of their foreign exchange reserves to green bonds.
JEL Classification: E58, F31, G11, G17
Suggested Citation: Suggested Citation