 Seizing central bank assets?Tobias Krahnke, Massimo Ferrari Minesso, Arnaud Mehl and Isabel Vansteenkiste No 19186, CEPR Discussion Papers from Centre for Economic Policy Research Abstract: We study the global macroeconomic and financial impacts of sanctions on central bank assets. We build a new database on freezes and seizures of central bank assets spanning 1914–2024, which we compare with discussions on today’s Russia. We show that the scale of the freeze on the Central Bank of Russia’s assets is rarely seen in history and that non-belligerent countries have never seized central bank assets to finance reconstruction in a third country in an ongoing war—unlike what is being discussed by scholars for today’s Russia. We propose a three-country DSGE model to provide a conceptual framework to understand the global impact of sanctions on central bank assets and tease out the macroeconomic mechanisms. A key insight of the model is that seizing central bank assets can backfire on the sanctioning country in general equilibrium. Calibrated model simulations suggest that seizing today’s Russia’s immobilized sovereign assets could lead to an increase in interest rates on U.S. government bonds of 90 basis points. Keywords: Sanctions (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:19186 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.