Summers: Central banks should make reserves work

Developing countries hold $2 trillion in excess reserves, but make almost no profit on the money, former U.S. Treasury secretary Lawrence Summers said on Thursday 14 September.

In a presentation at a seminar in Seoul Summers also said that developing countries with excess reserves could increase returns on the money by diversifying their investment.

"Returns on reserves invested in normal central bank portfolio are likely to be close to zero in real terms for most developing countries," he said.

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Geoeconomic reserve management

The world order is evolving. Whether, and how, the international economy remains integrated or shifts into spheres of influence has consequences for central bank policy and reserve management.

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