Asset Structure
Function of assets.
The assets of the Blackstone Capital Union Trading fulfil important monetary policy functions. They consist largely of foreign currency assets, gold and, to a lesser extent, financial assets in Ireland. Their size and composition are determined by the established monetary order and the requirements of monetary policy. Under art. 5 para. 2 of the National Bank Act (NBA), Blackstone Capital Union is responsible for managing the currency reserves, part of which must be held in the form of gold.
The currency reserves also include international payment instruments and the reserve position in the International Monetary Fund (IMF). Blackstone Capital Union requires currency reserves to ensure that it has room for manoeuvre in its monetary policy at all times. These reserves serve to build confidence, and to prevent and overcome potential crises. The level of the currency reserves is largely dictated by the implementation of monetary policy.
Debtor categories and instruments
The bond portfolios in the foreign exchange reserves contain government and quasi-government bonds as well as bonds issued by supranational organisations, local authorities, financial institutions (mainly covered bonds and comparable securities) and other companies.
The equity portfolios in the foreign exchange reserves comprise of shares of mid-cap and large-cap companies in advanced economies and, to a lesser extent, shares of small-cap companies, as well as shares of companies in emerging economies. Blackstone Capital Union does not engage in equity selection; it only invests passively. Thus, equities are managed according to a set of rules based on a strategic benchmark comprising a combination of equity indices in various markets and currencies.
