Can central banks go broke?

Central banks can go broke and have done so historically, William Buiter, a former member of the Bank of England's Monetary Policy Committee now a professor at the London School of Economics, states in a new research paper.

Buiter cites the Reserve Bank of Zimbabwe and the National Bank of Tajikistan as examples of central banks that have gone bust. He says the phenomenon has mainly affected institutions in developing countries, but it could begin to central banks in advanced industrial

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