Public Sector Holds $29.1 Trillion In Private Investments Says OMFIF Report b4in.org/c4cX Central banks around the world, including in Europe, are buying increasing volumes of equities as part of diversification by official asset holders that are now a global force on international capital markets. This is among the findings of Global Public Investor (GPI) 2014, the first comprehensive survey of $29.1 trillion (tn) worth of investments held by 400 public sector institutions in 162 countries. Credit: OMFIF The report, focusing on investments by 157 central banks, 156 public pension funds and 87 sovereign funds, underlines growing similarities among different categories of public entities owning assets equivalent to 40% of world output. It is published by the Official Monetary and Financial Institutions Forum (OMFIF), a global research and advisory group, with the support of DZ BANK and Quantum Global Group. In the aftermath of the financial crisis, different forms of ‘state capitalism’ have come to the fore, the report says: ‘Whether or not this trend is a good thing may be open to question. What is incontestable is that it has happened.’ The assets of the overall survey of 400 GPIs comprise $13.2tn (including gold) at central banks, $9.4tn at public pension funds and $6.5tn at sovereign wealth funds. One of the reasons for the move into equities reflects central banks’ efforts to compensate for lost revenue on their reserves, caused by sharp falls in interest rates driven by official institutions’ own efforts to repair the financial crisis. According to OMFIF calculations, based partly on extrapolations from published central bank data, central banks around the world have foregone $200bn to $250bn in interest income as a result of the fall in bond yields in recent years. This has been partly offset by reduced payments of interest on the liabilities side of their balance sheets. More b4in.org/c4cX
Posted on: Mon, 16 Jun 2014 20:32:23 +0000
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