As a member of the Network, the Bank contributed to the NGFS guide for central banks’ portfolio management, published last October.6 In this guide, the Bank’s first-hand experience in sustainable finance is one of seven case studies used as practical examples to ease the introduction of ESG practices among central banks. Let me now turn to the issue of strategic asset allocation (SAA).
Due to the increased complexity of the financial system, it has become crucial for central banks and other public-sector financial institutions to base their activities on a sound, comprehensive risk management framework.7 This can be provided by a formal SAA model-based procedure at the centre of the investment process.