By Sarah Jones
April 25 (Bloomberg) -- Central banks, guardians of the
world’s $11 trillion in foreign-exchange reserves, are buying
stocks in record amounts as falling bond yields push even risk-
averse investors toward equities.
In a survey of 60 central bankers this month by Central
Banking Publications and Royal Bank of Scotland Group Plc, 23
percent said they own shares or plan to buy them. The Bank of
Japan, holder of the second-biggest reserves, said April 4 it
will more than double investments in equity exchange-traded
funds to 3.5 trillion yen ($35.2 billion) by 2014. The Bank of
Israel bought stocks for the first time last year while the
Swiss National Bank and the Czech National Bank have boosted
their holdings to at least 10 percent of reserves.
“In the last year or so, I have spoken with 103 central
banks on diversification,” Gary Smith, London-based global head
of official institutions at BNP Paribas Investment Partners,
which oversees about $649 billion, said in a phone interview.
“If reserves are growing, so are diversification pressures.
Equities are not for every bank tomorrow, but more are.