About 50 business leaders gathered Tuesday evening for a special “BMI Presents…” session at the Bank of Lithuania. Officials there spoke in detail about how the international financial environment is evolving and how the central bank has successfully adapted its own investing strategies. Some participants were also able to visit the Bank of Lithuania’s trading room for added insights.
Bank of Lithuania Governor Vitas Vasiliauskas and BMI Director General Jaunius Pusvaškis greeted the gathering of BMI alumni and friends. Presentations were then made by the central bank’s Banking Service director, Mindaugas Vaičiulis, and the head of its Investment Management Department, Saulius Galatiltis. The first speaker previously worked in commercial bank treasury operations, while the second has experience in automated systematic trading.
They explained the specifics of asset management at the central bank, i.e., the investment of foreign reserves and euro holdings seeking to cover operating costs and contribute to the state budget. They also examined the challenges of the very low interest-rate environment of recent years.
Over the past 3 years, the Bank of Lithuania, seeking to achieve reasonable returns, expanded and reshuffled its portfolio to include riskier assets, like equities, while keeping the overall risk profile within clear bounds and properly diversified. The result? The central bank earned a quite impressive return of 5.3 percent for the period, which meant gains of 198 million euros, Mr Vaičiulis said.
Mr Galatiltis focused more on further changes planned in the central bank’s investment policy in the near future. One is new attention to systematic investment – a more passive approach where computers help identify opportunities and make trading decisions based on rules that are set.
The evening finished with a lively round of questions and answers.