In our commitment to lead by example, we are actively embedding sustainability in our forex [foreign exchange] reserves management: Last August 2022, the Investment Management Committee (IMC) approved the inclusion of green bonds as allowable investments in our internally managed portfolios. We have also included ESG scores and climate risk as additional screens for our corporate bond investments and our external fund managers.
1 Second, when concerns about sovereign debt become acute – even if they are limited to a few countries – they can have pervasive effects on the financial system. These effects stem from the fundamental importance of government liabilities in the financial system.