INTOSAI Working Group on Public Debt - guidelines for risk management of public debt and assets INTOSAI

DI. Mauser, Austrian Court of Audit S. 2 Debt management -Sufficient financial skills as an absolute necessity -Optimizing of debt portfolio: fixed interest, variable interest - use of other currencies only when clear advantages of interest payment; daily monitoring of curreny risks with clear limits

INTOSAI DI. Mauser, Austrian Court of Audit S. 3 Derivatives (Swaps, futures,...) - use only to optimize the structure of the portfolio (for example the proportion of fixed to variable interest payments) -Do not use more volume of (netted) derivatives than you have debt - use only standardized products - measure the risk (for example with use of Value at Risk-Models)

INTOSAI DI. Mauser, Austrian Court of Audit S. 4 Risk Management - use appropriate methods to limit and control financial risks (for example Value at Risk, Cashflow at Risk, Modified Duration) - establish a system of limits for maximum debt, maximum volume of swaps, maximum Value at Risk,... - establish monthly reports -Be cautious with financial instruments with complex structures

INTOSAI DI. Mauser, Austrian Court of Audit S. 5 Asset Management -Make clear which asset classes can be used and which not -Take care that sufficient diversification is achieved -Measure the performance of the portfolio at least once a year -Check the achieved performance with an appropriate benchmark -The portfolio with the lowest standard deviation for a given return is recognised as the most diversified