2015-09-10
Challenge of low interest rates encourages even conservative investors to change
The environment of low interest rates and significant fluctuations in the financial markets encourages central banks and other conservatively-investing investors to change their usual investment models and look for new opportunities to earn return without decreasing the security of investments — this was claimed at the international institutional investors conference in Vilnius, organised by the Bank of Lithuania.
“Particularly low and even negative interest rates for secure investments — one of the the greatest challenges for conservative investors, seeking to earn a positive return and at the same time maintain a very high level of investment security. The Bank of Lithuania takes on this challenge by seeking new sources of return and ways to increase the diversification of the investment portfolio, as well as installing other investment management innovations,” says Tomas Garbaravičius, Member of the Board of the Bank of Lithuania.
The Bank of Lithuania, taking into account the euro adoption, the development of the European and global economic and financial markets, in recent years has been actively improving the financial assets management policy and included equity securities (shares) in the investment portfolio, as well as corporate bonds, which ensure greater return; also, the Bank of Lithuania was one of the first banks among the EU country central banks to invest in China’s government securities market. This year the Bank of Lithuania also signed an agreement with the World Bank in regards to management of financial assets valued at USD 300 million; this way it even more diversified investment portfolio risk and expanded the investment map. The funds of the portfolio managed together with the World Bank will be invested in Canada’s and Great Britain’s bonds, as well the USA’s debt securities.
At the conference in Vilnius, dedicated to central banks and institutional investors, the following is discussed: the newest investment portfolio establishment and management trends, application of the life cycle strategy to pension funds, currency risk assessment and management models, other problems related to investment management and possible solutions.
Around 100 investment management professionals from around the world participate in the conference, presentations are given and experience shared by experts from the Bank of Lithuania, European Central Bank, Austrian, Brazilian, Latvian, Polish, Mexican, South Korean, Portuguese, Swiss and other central banks, the World Bank.