Central banks build expertise in move to riskier reserve tranches
Growing popularity of reserves tranching is stretching central banks’ capabilities, new report finds
Central banks are increasingly adding risk to their reserves portfolios via the use of tranches, but the move into relatively unknown territory is forcing them to learn fast.
Emerging markets pioneered the use of tranches, where a section of reserves is devoted to a narrower, often riskier, goal, according to a survey of reserve managers published today (June 5) by Invesco. Developed economy central banks are now starting to follow suit, the survey finds.
The results imply developed economy
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