Central Bank’s Investment Assets

Management of the Investment Portfolios

The parameters within which the investment portfolios are managed are determined by the Commission of the Central Bank. These include: 

• Approved investment instruments 
• Currency composition of Investment Assets
• Level of risk considered appropriate for investment activities. 

Approved Investment Instruments:

• Government bonds and other high-quality fixed income securities
• Deposits
• Repurchase and Reverse Repurchase agreements
• Other money market instruments
• Futures
• Equities
• Gold.

Currency composition of Investment Assets

• The Central Bank’s investment portfolio is currently denominated in euro (approximately 77 per cent) and foreign currency (approximately 23 per cent) financial assets.

Risk 

• The Central Bank manages its MTM investment assets by reference to benchmark portfolios.
• These benchmark portfolios incorporate the Central Bank’s preferences for liquidity, risk and return.

Sustainable Investment

System of controls, limits and procedures: 

The Commission Risk Committee (CRC)

• Reviews investment policy and performance.

The Risk Management Committee (RMC)

• Ensures risks are managed within the Commission’s approved risk appetite and associated tolerances.

The Financial Risk Working Group (FRWG)

• Considers policy issues and strategy relating to the investment portfolio.
• Chaired by the Director of Strategy and Governance, includes senior staff of   Financial Markets (FMD), Financial Control (FCD) and the Organisational Risk Divisions (ORD). An Investment Assets Working Group

An Investment Assets Working Group

• Chaired by the Director of Financial Operations. 
• Comprises management and senior staff of the Financial Markets and Payments and Securities Settlements Divisions (PSSD). 
• Meets eight times per year to review investment performance and short-term policy. 

A Standing Investments Working Group

• Comprises management, portfolio managers and market analysts of FMD, together with a representative from ORD, PSSD and FCD.
• Meets weekly to formulate short-term policy. 

Investment Desk

• Carries out the day-to-day portfolio management activities that are required to implement investment decisions and to ensure that our investment assets are fully invested. 

Organisational Risk Division

• Carries out risk monitoring and performance measurement, independently of the Financial Markets Division. 
  • The “Risk Management” section of the Bank’s website outlines the role of the Organisational Risk Division, the key risk exposures of the Central Bank, as well as the measures in place to mitigate these risks.