Central bank profits under pressure

The structure of a central bank’s portfolio and its relationship with shareholders can affect shock-absorbing capital and the amount of profit distributed


Profits aren’t the main objectives of a central bank, but a dependence on government to recapitalise the bank can pose a risk to a central bank’s independence. In turn, central bank independence exists in part to prevent reckless government financing.

It is true that central banks can operate with negative equity: Israel, the Czech Republic and Chile are examples. Indeed, European Central Bank president Christine Lagarde has said the ECB, as the sole issuer of euro-denominated central bank

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@centralbanking.com or view our subscription options here: http://subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact info@centralbanking.com to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

Register for Central Banking

All fields are mandatory unless otherwise highlighted

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account