Investment portfolio

Banca d'Italia holds and manages a financial portfolio that includes investments backed by equity and capital reserves, as well as other investments made in compliance with the Net Financial Assets agreement drawn up by the Eurosystem.

The objectives of financial portfolio management are to contribute to covering the Bank's operating costs and to preserve its financial soundness through the prudent pursuit of returns and the containment of financial risks. This objective is complemented by the integration of environmental, social and corporate governance (ESG) considerations into investment decisions, with the aim of improving the risk-return profile and contributing to environmental protection, in line with national and EU legislative frameworks. The guiding principles of this approach are set out in the Responsible Investment Charter.

The governance of investments, the strategy, the portfolio management methods and the results of sustainable investment activities are published in the Annual report on sustainable investments and climate-related risks.

The portfolio mainly consists of government securities issued by Italy and other euro-area countries; the remaining bonds are issued by supranational organizations and highly rated private companies. A portion of the portfolio is invested directly in listed euro-area equities and indirectly in units of investment funds (UCITS) denominated in foreign currencies.

All securities issued by banking, insurance and financial services companies in the euro area are excluded from investment to avoid potential conflicts of interest relating to the Bank's supervisory activities. Furthermore, to avoid reputational risks, Italian media sector equities are excluded. Direct ownership stakes in companies are kept low to reduce reputational risks and prevent potential conflicts of interest with institutional functions.

Investments include some unlisted companies' holdings, the list of which is published in the Shareholdings section. The Bank also holds shares of funds that invest in small and medium-sized Italian unlisted firms.

The Bank manages the defined-contribution supplementary pension fund for staff hired from April 28 1993 onwards, which constitutes a separate asset, with autonomous recognition in the financial statements.

The updated value of the investment portfolio and its composition are published annually in Banca d'Italia's Annual Accounts and in the Activity and Sustainability Report.