Why do central banks make losses?

Why should central banks care about loses? Central banks care about public goods like maintaining price and financial stability and are not profit-maximising enterprises. Therefore, losses do not necessarily jeopardise the central banks' objectives. Even in the extreme case, in which losses exceed the capital buffer, the central bank can be recapitalised by the government, as it is usually part of the public sector.

Central banks, however, have become more aware of risk management and pay more a

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