Green Bonds: The Reserve Management Perspective

15 Pages Posted: 14 Oct 2019

See all articles by Ingo Fender

Ingo Fender

Bank for International Settlements (BIS)

Mike McMorrow

Bank for International Settlements (BIS)

Vahe Sahakyan

Bank for International Settlements (BIS)

Omar Zulaica

Bank for International Settlements (BIS)

Date Written: September 22, 2019

Abstract

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

Fender, Ingo and McMorrow, Mike and Sahakyan, Vahe and Zulaica, Omar, Green Bonds: The Reserve Management Perspective (September 22, 2019). BIS Quarterly Review, September 2019. Available at SSRN: https://ssrn.com/abstract=3468434

Ingo Fender (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

HOME PAGE: http://www.bis.org

Mike McMorrow

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Vahe Sahakyan

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Omar Zulaica

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

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