Why are central banks reporting losses? Does it matter?

Sarah Bell, Michael Chui, Tamara Gomes, Paul Moser-Boehm and Albert Pierres Tejada

No 68, BIS Bulletins from Bank for International Settlements

Abstract: Rising interest rates are reducing profits or even leading to losses at some central banks, especially those that purchased domestic currency assets for macroeconomic and financial stability objectives. Losses and negative equity do not directly affect the ability of central banks to operate effectively. In normal times and in crises, central banks should be judged on whether they fulfil their mandates. Central banks can underscore their continued ability to achieve policy objectives by clearly explaining the reasons for losses and highlighting the overall benefits of their policy measures.

Pages: 9 pages
Date: 2023-02-07
New Economics Papers: this item is included in nep-cba and nep-mon
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