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Central Banks

With over 70 years of experience, the World Bank Treasury through RAMP helps central banks build human capital in asset management.

 

The World Bank has nearly US$200 billion in assets under management

Central banks manage substantial foreign exchange assets to meet foreign currency needs and manage exchange rate fluctuations. Policy objectives for these portfolios typically encompass safety, liquidity and earning a competitive return. The World Bank Treasury has more than seven decades of experience managing similar portfolios with a track record of outperforming policy benchmarks while controlling downside risks in a disciplined fashion.

Nearly 30 years of experience in consulting and building human capital

Since the 1990s, the World Bank Treasury has helped build central banks’ asset management capacity. These engagements are led by experienced investment management professionals with senior level experience running reserve management operations in major central banks. These practitioners bring to member work a solid understanding of issues relating to central bank policy decisions, organizational structure and staffing. While we customize engagements to individual member needs, most central bank engagements cover the areas described below.

Governance and institution building

We assist central bank policy makers with strengthening their institution’s governance structure through defining policy objectives and ensuring that an investment policy, investment guidelines, and a strategic asset allocation are in place. These tools help align objectives with investments and control risks within acceptable levels while targeting a competitive market return on assets.

Developing internal strategic asset allocation capabilities

We assist with building in-house capacity to develop policy proposals for strategic asset allocation and translating the SAA into replicable benchmark portfolios. RAMP provides members with proprietary in-house software, the Asset Management Workbench, to develop and stress test the SAA, and provide staff technical training on both the theory and use of the model.

Expanding internal asset management capacity

We assist fund managers with expanding asset management skills across broad fixed income sectors, including money market instruments, high grade government and agency bonds, interest rate futures, and agency mortgage-backed securities.

Risk management and analytics

We help develop a multi-faceted risk management function with robust quantitative and qualitative risk indicators encompassing market, credit and operational risk.

Engaging external partners

We assist with engaging external service providers, including asset managers, and global custodian and systems providers. We also help with developing capacity to manage an external asset management program.

Building legal expertise in investment transactions

We provide legal training to in-house lawyers relating to sovereign immunities and protecting central bank interests under contractual arrangements for securities lending, futures transactions, external asset manager programs and private sector custodial services.

Developing a public communication strategy

We assist with developing a communication strategy and reporting framework to provide meaningful financial reporting and address frequently asked questions on investment strategy and risk from official stakeholders, the media and the public.