Central banks are increasingly interested in environmentally sound and socially responsible investment, with 43% of respondents to the HSBC Reserve Management Trends survey for 2021 saying they had bought green bonds.
Just 25% of institutions were not embarking on the trend, citing a lack of compatibility with mandates as the main reason. Climate change is a key element of the strategic review currently underway at the ECB, and monetary authorities elsewhere are also addressing the topic.
At 43%, the share of institutions holding green bonds was higher than for inflation-linked bonds or mortgage-backed securities. Interest in green bonds was particularly strong among high-income countries, the HSBC-sponsored poll found.
Central banks have responded to the COVID-19 pandemic with record stimulus, and the survey found reserve managers cited the low-yield environment as their biggest challenge. Particularly in high-income countries, they were considering investing in new asset classes. In the long run, digital currencies were seen as having an impact on management of reserves, the survey said.
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