BIS report highlights challenge of modelling green reserve portfolios
Survey of central banks finds legal mandates and liquidity make green reserves management difficult
A study published by the Bank for International Settlements highlights the issues reserve managers face if they want to incorporate green assets into their portfolios.
The report, prepared by BIS member central banks in the Americas, says a “significant methodological challenge” is to model climate factors and “their connection to portfolio risk and return characteristics”.
The lack of “comprehensive, timely and accurate” climate risk data is another factor holding central banks back, the
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