Former BoE staff clash over reserves accounting in Central Banking debate
Reserve managers face hefty mark-to-market losses as monetary policy normalises
Imposing ‘mark-to-market' accounting on central bank reserves would be an extremely ill-timed move as real interest rates return to positive territory, according to London School of Economics professor Charles Goodhart. But university lecturer and former Bank of England (BoE) reserves portfolio manager Tim Young said not doing so is akin to "an ostrich sticking its head in the sand".
The two locked horns over the suitability of mark-to-market accounting in the context of a wider discussion of
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