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Central Bank Financial Strength, Transparency, and Policy Credibility Author info | Abstract | Publisher info | Download info | Related research | Statistics Peter Stella
A central bank is financially strong if it possesses resources sufficient to attain its fundamental policy objective(s). Once endowed with those resources, relations between government and central bank should be designed so that significant changes in central bank financial strength do not occur unless necessitated by changes in policy objectives. The level of strength required depends on the array of policy objectives (for example, the exchange rate regime) as well as the constraints and risks presented by the operational environment. Attaining credibility is facilitated if the public can easily determine the financial strength of the bank, yet for a variety of reasons this is often difficult. Transparency requires institutional arrangements that ensure the central bank generates profit in most states of the world, is subject to strict ex post independent audit, and transfers regularly all profits, after provisions, to the treasury.
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Paper provided by International Monetary Fund in its series IMF Working Papers with number
02/137.
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Length: 42 pages
Date of creation: 04 Sep 2002Date of revision:
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Keywords: Central banks ; Transparency ; Central bank policy ; Economic models ; References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.:
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Faust, J. & Svensson, L.E.O., 1998.
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Other versions:
Cukierman, A. & Miller, G.P. & Neyapti, B., 2000.
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Discussion Paper
106, Tilburg University, Center for Economic Research.
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Other versions:
Milesi-Ferretti, Gian Maria, 2001.
"Good, Bad or Ugly? On the Effects of Fiscal Rules with Creative Accounting ,"
CEPR Discussion Papers
2663, C.E.P.R. Discussion Papers.
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[Downloadable!] (restricted)
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Ljungwall, Christer & Xiong, Yi & Zou, Yutong, 2009.
"Central Bank Financial Strength And The Cost Of Sterilization In China ,"
Working Paper Series
2009-8, China Economic Research Center, Stockholm School of Economics.
[Downloadable!]
Luis Felipe Céspedes & Rodrigo Valdés, 2006.
"Autonomía de Bancos Centrales: La Experiencia Chilena ,"
Working Papers Central Bank of Chile
358, Central Bank of Chile.
[Downloadable!]
Olivier Jeanne & Lars E.O. Svensson, 2004.
"Credible Commitment to Optimal Escape from a Liquidity Trap: The Role of the Balance Sheet of an Independent Central Bank ,"
NBER Working Papers
10679, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Jeanne, Olivier & Svensson, Lars E O, 2004.
"Credible Commitment to Optimal Escape from a Liquidity Trap: The Role of the Balance Sheet of an Independent Central Bank ,"
CEPR Discussion Papers
4599, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Olivier Jeanne & Lars E. O. Svensson, 2004.
"Credible Commitment to Optimal Escape from a Liquidity Trap: The Role of the Balance Sheet of an Independent Central Bank ,"
IMF Working Papers
04/162, International Monetary Fund.
[Downloadable!] Olivier Jeanne & Lars E. O. Svensson, 2007.
"Credible Commitment to Optimal Escape from a Liquidity Trap: The Role of the Balance Sheet of an Independent Central Bank ,"
American Economic Review ,
American Economic Association, vol. 97(1), pages 474-490, March.
[Downloadable!] Alex Cukierman, 2006.
"Central Bank Independence and Monetary Policymaking Institutions: Past, Present, and Future ,"
Working Papers Central Bank of Chile
360, Central Bank of Chile.
[Downloadable!]
Other versions:
Alex Cukierman, 2006.
"Central Bank Independence and Monetary Policymaking Institutions: Past, Present, and Future ,"
Working Papers
200741, Faculty of economics, Department of Economics, revised Sep 2007.
[Downloadable!] Cukierman, Alex, 2007.
"Central Bank Independence and Monetary Policymaking Institutions - Past Present and Future ,"
CEPR Discussion Papers
6441, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Cukierman, Alex, 2008.
"Central bank independence and monetary policymaking institutions -- Past, present and future ,"
European Journal of Political Economy ,
Elsevier, vol. 24(4), pages 722-736, December.
[Downloadable!] (restricted) Alex Cukierman, 2006.
"Central Bank Independence And Monetary Policy Making Institutions: Past, Present, And Future ,"
Journal Economía Chilena (The Chilean Economy) ,
Central Bank of Chile, vol. 9(1), pages 5-23, April.
[Downloadable!]
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