Citi Continues to Support Recovery Efforts

What does ‘generating value from the balance sheet’ mean in practice for the public sector? Governments everywhere at every level own a vast array of commercial assets. According to the IMF, the value of public assets globally is twice that of global stock markets, twice global GDP and much larger than public debt. However, unlike listed equity assets, the public wealth is often unaudited, unsupervised, and unregulated. Even worse, in most countries it is almost entirely unaccounted for.

This article looks at how multilateral development banks are helping borrowers, many of which have massive financing needs in the wake of the COVID-19 pandemic, to better insulate themselves from global events and systemic shocks by modifying the currency-denomination of their existing loans.

Public Sector Investment Funds, including Central Banks, public pension funds and sovereign wealth funds, account for over half the world's professionally-managed assets. In this article, we outline ways that they can respond to today's challenges, many intensified by the COVID-19 crisis, and highlight practical approaches to help navigate this evolving and complex risk environment.