Crown Financial Asset Management: Objectives and Practice

Arthur Grimes

Treasury Working Paper Series from New Zealand Treasury

Abstract: This paper analyses key issues that may be relevant to setting the Crown's overall objectives and practices for financial asset and liability management. It examines implications of the nature of the Crown's balance sheet for asset and liability management and investigates the appropriate approach of the Crown towards managing risk (concluding that a risk averse approach is warranted). The issue of centralisation versus decentralisation of Crown asset and liability management is analysed both from a portfolio management perspective and from an organisational design perspective. Insights from private sector financial conglomerates are also incorporated. The paper concludes that individual Crown financial entities should each continue to be responsible for setting their own strategic asset allocation, after taking into account the nature of their liabilities. A central Crown body should, however, monitor and aggregate information from each of these entities and be delegated the responsibility and power to manage risks to the overall Crown balance sheet.

Keywords: Crown balance sheet; Public debt management (search for similar items in EconPapers)
JEL-codes: H11 H63 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2001
References: Add references at CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:nzt:nztwps:01/12

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