From CNBC:
As the Bank of Japan ramps up its monetary stimulus to include buying equities, Jim O'Neill, chairman of Goldman Sachs Asset Management, said it makes sense for central banks to own stocks. O'Neill spoke with CNBC at the Goldman Sachs Growth Markets Summit in New York.HT: Clusterstock
After a survey by RBS was published earlier this month that showed a greater appetite for central banks to invest in equities, "I don't think people should worry about that," said O'Neill. He added that many sovereign wealth funds are tied to central banks and are already investing in stocks.
Earlier this month, the Bank of Japan promised to pump $1.4 trillion into the economy in less than two years to combat deflation through open-ended asset purchases. The central bank said on April 4 that it will more than double investments in equity exchange-traded funds by the end of 2014. The Bank currently holds ¥1.4 trillion ($14.1 billion) in ETFs with a target of ¥3.5 trillion ($35.3 billion) in 2014.
"Frankly, it makes a huge amount of sense in a world of floating exchange rates and such incredible opportunity, why should central banks keep so much money in very short term, liquid things when they're not going to ever need it?" O'Neill said. "To help their future returns for their citizens, why would they not invest in equity?"...MORE