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The strategic allocation and sustainability of central banks' investment

Author

Listed:
  • Davide Di Zio

    (Bank of Italy)

  • Marco Fanari

    (Bank of Italy)

  • Simone Letta

    (Bank of Italy)

  • Tommaso Perez

    (Bank of Italy)

  • Giovanni Secondin

    (Bank of Italy)

Abstract

In recent years, the extensive recourse to unconventional monetary policy measures and the growing importance of the transition process towards a sustainable economy have given rise to new challenges for the Eurosystem’s central banks in managing financial risks. In this context, central banks’ investment strategies, whose goal is to reinforce capital strength, have been combined with the adoption of criteria aimed at fostering a sustainable growth model. This work describes the strategic allocation process for investment developed by the Bank of Italy and the methodology adopted for applying sustainability criteria to some of the portfolio’s asset classes.

Suggested Citation

  • Davide Di Zio & Marco Fanari & Simone Letta & Tommaso Perez & Giovanni Secondin, 2021. "The strategic allocation and sustainability of central banks' investment," Mercati, infrastrutture, sistemi di pagamento (Markets, Infrastructures, Payment Systems) 14, Bank of Italy, Directorate General for Markets and Payment System.
    • Handle: RePEc:bdi:wpmisp:mip_014_21
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    File URL: https://www.bancaditalia.it/pubblicazioni/mercati-infrastrutture-e-sistemi-di-pagamento/approfondimenti/2021-014/N.14-MISP.pdf
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    More about this item

    Keywords

    central banks; investment allocation; sustainability; Bayesian VAR;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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