Tags: O’Neill | central banks | stocks | Japan

Goldman Sachs’ O’Neill: ‘It Makes Sense’ for Central Banks to Own Stocks

By    |   Friday, 26 April 2013 08:36 AM

As the Bank of Japan increases its equity holdings, Jim O'Neill, chairman of Goldman Sachs Asset Management, says it makes perfect sense for other central banks to own stocks as well.

The Bank of Japan announced earlier this month that it will boost its portfolio of equity exchange-traded funds to 3.5 trillion yen ($35.2 billion) by the end of next year from 1.4 trillion yen ($14.1 billion) currently.

"Frankly, it makes a huge amount of sense in a world of floating exchange rates and such incredible opportunity” for the banks to own stocks, O’Neill told CNBC.

Editor's Note:
Billionaires Dump Stocks. Prepare for the Unthinkable.

“Why should central banks keep so much money in very short-term, liquid things when they're not going to ever need it? To help their future returns for their citizens, why would they not invest in equities?"

O’Neill pointed out that many sovereign wealth funds are tied to central banks and already invest in stocks.

When it comes to the Federal Reserve, the big issue now is not whether it will purchase stocks, but how much longer it will keep buying $85 billion of Treasurys and mortgage-backed securities a month.

“We heard a lot of discussion earlier in the year on the timing of tapering” down the purchases, Ward McCarthy, chief financial economist at Jefferies Group, told Bloomberg.

“Some of the more recent developments — the slowdown in the economy, the somewhat disquieting inflation data — have taken that off the table for now.”

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

© 2019 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
StreetTalk
As the Bank of Japan increases its equity holdings, Jim O'Neill, chairman of Goldman Sachs Asset Management, says it makes perfect sense for other central banks to own stocks as well.
O’Neill,central banks,stocks,Japan
255
2013-36-26
Friday, 26 April 2013 08:36 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved