Official reserves may be needed as a cushion when markets get suddenly risk averse and hence, safety and liquidity should normally have higher orders of priority in the management of reserves. Fifth, it is possible for a central bank to have tranches – each tranche reflecting a different combination of safety, liquidity and return.
Each tranche can be managed by the central bank or an external asset manager, or both, in parallel, to benchmark their relative performance. Finally, and above all, the criticality of the accountability in the use of reserves must be recognised.