These findings are based on fieldwork conducted during January 2014 by FT Remark. In association with State Street, FT Remark surveyed 62 senior executives at official institutions – defined as central banks, sovereign wealth funds and public pension reserve funds – to explore the opportunities and challenges they face today and in the future.

1. OFFICIAL INSTITUTIONS
New Horizons for Official Institutions
an FT Remark and State Street Study
Executive Summary
April 2014
This presentation features data from the
2014 State Street Official Institutions
Study conducted by FT Remark.
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2. 2
OFFICIAL INSTITUTIONS
State Street 2014 Official Institutions Study
About the Research
These findings are based on fieldwork conducted during January 2014 by FT Remark. In association
with State Street, FT Remark surveyed 62 senior executives at official institutions – defined as central
banks, sovereign wealth funds and public pension reserve funds – to explore the opportunities and
challenges they face today and in the future. Additional interviews were conducted during February and
March to gain deeper qualitative insight.
58%
34%
8%
Respondents by Type
Central Bank
Sovereign Wealth Fund
Public Pension Reserve Fund
45%
29%
26%
Respondents by Region
EMEA
APAC
Americas
42%
11%
47%
Respondents by Role
Investment
Operations
Combination of above
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OFFICIAL INSTITUTIONS
State Street 2014 Official Institutions Study
Top Priorities for Official Institutions
13%
15%
13%
21%
13%
25%
29%
31%
44%
47%
50%
65%
Developing talent
Supporting governance requirements
Optimizing investment strategy
Improving operational efficiency
Managing data
Managing risk
Percentage who rate as significant challenge*
Percentage who rate as No. 1 challenge
*Multiple selections allowed.
Source: State Street 2014 Official Institutions Study conducted by FT Remark
Official institutions are balancing a diverse, complex set of challenges.
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OFFICIAL INSTITUTIONS
State Street 2014 Official Institutions Study
Managing Portfolio Complexity
73% Have difficulty keeping up with the changes in regulation across the global markets
they invest in
51% Indicate that correctly measuring and monitoring the amount of currency risk they are
taking is a challenge
38% Believe that adjusting to higher interest rates will be their single biggest investment
strategy challenge over the next two years
35% Are concerned the cost of execution will go up given collateral issues and additional
reporting requirements
Official institutions are looking to new markets and types of investment to generate returns,
creating new levels of portfolio complexity.
Of the institutions we surveyed:
Source: State Street 2014 Official Institutions Study conducted by FT Remark
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OFFICIAL INSTITUTIONS
State Street 2014 Official Institutions Study
Monitoring, Measuring and Reporting Risk
• 86 percent of respondents rate market risk as
one of their top three concerns, and it is the
biggest risk-related concern for more than one-
third (36 percent)
• Just under three-quarters (73 percent) say
operational risk is a top-three risk, and it comes
top for one-quarter (26 percent)
• Sixty percent of respondents plan significant
updates to their risk management systems over
the next two years
• Thirty-two percent of respondents say it is
difficult to recruit the talent they need for
effective risk management
0% 25% 50% 75% 100%
Legal risk
Political risk
Counterparty risk
Liquidity risk
Data security risk
Operational risk
Market risk
Most important
Second most important
Third most important
Of the multitude of risks that official institutions must now consider, the two biggest areas of
concern are market risk and operational risk.
Source: State Street 2014 Official Institutions Study conducted by FT Remark CORP-0978

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OFFICIAL INSTITUTIONS
State Street 2014 Official Institutions Study
Optimizing Operations
Source: State Street 2014 Official Institutions Study conducted by FT Remark
4.79
4.95
5.28
5.43
4.41
4.56
4.61
5.57
Least
Important
1
Most
Important
6
Operations
Minimizing operational costs
Maintaining an operating infrastructure that
fully supports investment policies/needs
Balancing mix of in-house and outsourced
activities
Ensuring integrated front-to-back office
processing
Data
Ensuring data security
Integrating performance and risk analytics
Conducting regular, comprehensive scenario
analysis and stress testing on portfolio
Managing and cleansing multiple data
streams in varying formats
Level of priority placed by official
institutions (average score)
Official institutions must create streamlined yet resilient operational models, which means
reducing costs while not compromising on standards.
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OFFICIAL INSTITUTIONS
Action Plan for Official Institutions
Focus for the Future
Challenges Key Areas of Focus
Deliver Investment Objectives in a
More Complex Market Environment
• Reassess and balance risk against return, within specific
investment strategy, and develop appropriate benchmarks
• Increase exposure across markets and asset classes in a way that
supports strategy
Meet Changing Regulatory
Requirements Across Global Markets
• Stay up-to-date with requirements across all relevant markets
• Build and add to capability in risk and reporting
Identify and Manage Risks
Across More Diverse Areas
• Treat risk management as an ongoing process and perform regular audits
• Closely monitor liquidity profile to support risk management
Improve Operational
and Cost Efficiency
• Identify and eliminate process inefficiencies
• Refine outsourcing model to make best use of internal expertise and third-
party providers
Generate Greater Value From Data • Consolidate data provision to minimize costs and maximize value
• Make use of powerful data and analytic decision-making tools to make
better-informed investment decisions and fulfil regulatory requirements
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