Larger Central Bank Balance Sheets: A New Normal for Monetary Policy?

Ramaswamy, Srichander; Turner, Philip

doi:10.1007/978-3-030-43457-1_3

Cited by 1 publication

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“…Over the medium term, it will be the oil-exporting countries that will build up investment positions in RMB, and they will have to revisit their investment framework for the management of FX reserves or of their sovereign wealth funds. However, tradition should not constrain the choice of investment assets to only government securities (Ramaswamy and Turner, 2020). Indeed, many central banks are now starting to invest in emerging market government debt, bonds with non-sovereign credit risk, and equities.…”

Section: Reserve Holdings: Motives and Constraintsmentioning

confidence: 99%

The Threat of Financial Sanctions: What Safeguards Can Central Banks Build?

Ramaswamy¹

2022

China and World Economy

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The sanctions imposed by the G10 countries on financial institutions in Russia, including on its central bank, will come under scrutiny by emerging market central banks. This will help them build appropriate safeguards against disruptions to cross‐border transactions and revise their investment mandates to reduce the risk of reserve asset freezes. Building new financial market infrastructure and cross‐border payment systems, or strengthening existing ones, will become the priority of emerging global powers. The goal will be to build systems that support democratic governance mechanisms, have oversight arrangements involving the central banks of trusted countries, and promote fair and safe access to clearing and settlement under well‐defined policy guidelines. The use of alternatives to the US dollar as the invoicing currency in international trade will gather momentum. Markets for energy and other commodities will be the change drivers. China has an important role to play.

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Section: Reserve Holdings: Motives and Constraintsmentioning

confidence: 99%