Crown Financial Asset Management: Objectives and Practice
AbstractThis paper analyses key issues that may be relevant to setting the Crown's overall objectives and practices for financial asset and liability management. It examines implications of the nature of the Crown's balance sheet for asset and liability management and investigates the appropriate approach of the Crown towards managing risk (concluding that a risk averse approach is warranted). The issue of centralisation versus decentralisation of Crown asset and liability management is analysed both from a portfolio management perspective and from an organisational design perspective. Insights from private sector financial conglomerates are also incorporated. The paper concludes that individual Crown financial entities should each continue to be responsible for setting their own strategic asset allocation, after taking into account the nature of their liabilities. A central Crown body should, however, monitor and aggregate information from each of these entities and be delegated the responsibility and power to manage risks to the overall Crown balance sheet.
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Bibliographic InfoPaper provided by New Zealand Treasury in its series Treasury Working Paper Series with number 01/12.
Length: 49 pages
Date of creation: 2001
Date of revision:
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Postal: New Zealand Treasury, PO Box 3724, Wellington, New Zealand
Phone: +64-4-472 2733
Fax: +64-4-473 0982
Web page: http://www.treasury.govt.nz
More information through EDIRC
Crown balance sheet; Public debt management;
Find related papers by JEL classification:
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-09-26 (All new papers)
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- Craig Fookes, 2011. "Modelling Shocks to New Zealand's Fiscal Position," Treasury Working Paper Series, New Zealand Treasury 11/02, New Zealand Treasury.
- Udaibir S. Das & Yinqiu Lu & Michael G Papaioannou & Iva Petrova, 2012. "Sovereign Risk and Asset and Liability Management," IMF Working Papers, International Monetary Fund 12/241, International Monetary Fund.
- Eric Hansen, 2003. "Objectives, Targets and Instruments for Crown Financial Policy," Treasury Working Paper Series, New Zealand Treasury 03/21, New Zealand Treasury.
- Nick Davis, 2001. "Does Crown Financial Portfolio Composition Matter?," Treasury Working Paper Series, New Zealand Treasury 01/34, New Zealand Treasury.
- Wilson Au-Yeung & Jason McDonald & Amanda Sayegh, 2006. "Australian Government Balance Sheet Management," NBER Working Papers 12302, National Bureau of Economic Research, Inc.
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