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Capitalizing Central Banks: A Net Worth Approach Author info | Abstract | Publisher info | Download info | Related research | Statistics Alain Ize
This paper provides a simple, quantitative, net worth-based, approach to assessing the need for central bank capital. It derives a concept of "core capital" (a function of the central bank's operating expenditures and the carrying cost of its international reserves) as the minimum capital needed by a central bank to ensure the credibility of its inflation target. The approach is illustrated with the published accounts of three loss-making central banks and selected accounting entries for a broader sample of central banks. Policy implications are explored. In particular, the paper argues that central bank capitalizations cannot be automatic and require instead a broad policy debate.
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Paper provided by International Monetary Fund in its series IMF Working Papers with number
05/15.
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Length: 25 pages
Date of creation: 02 Feb 2005Date of revision:
Handle: RePEc:imf:imfwpa:05/15Contact details of provider: Postal: International Monetary Fund, Washington, DC USA Phone: (202) 623-7000 Fax: (202) 623-4661 Email: Web page: http://www.imf.org/external/pubind.htm More information through EDIRC
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Keywords: Central banks ; Costa Rica ; Chile ; Mozambique ; Capital ; Reserves ; Other versions of this item:
This paper has been announced in the following NEP Reports :
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.: J.Ramon Martinez-Resano, 2004.
"Central bank Financial Independence ,"
Macroeconomics
0403011, EconWPA.
[Downloadable!]
Aizenman, Joshua & Marion, Nancy, 2003.
"The high demand for international reserves in the Far East: What is going on? ,"
Journal of the Japanese and International Economies ,
Elsevier, vol. 17(3), pages 370-400, September.
[Downloadable!] (restricted)
Other versions:
Joshua Aizenman & Nancy Marion, 2002.
"The high demand for international reserves in the Far East: what's going on? ,"
Pacific Basin Working Paper Series
02-08, Federal Reserve Bank of San Francisco.
[Downloadable!] Joshua Aizenman & Nancy Marion, 2002.
"The High Demand for International Reserves in the Far East: What's Going On? ,"
NBER Working Papers
9266, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Joshua Aizenman & Nancy P. Marion, 2002.
"The high demand for international reserves in the Far East: what's going on? ,"
Proceedings ,
Federal Reserve Bank of San Francisco, issue Sep.
[Downloadable!] Robert P. Flood & Nancy Peregrim Marion, 2002.
"Holding International Reserves in an Era of High Capital Mobility ,"
IMF Working Papers
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G. A. Mackenzie & Peter Stella, 1996.
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Working Papers Central Bank of Chile
299, Central Bank of Chile.
[Downloadable!]
Full
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!]
Jean-Francois Segalotto & Marco Arnone & Bernard Laurens, 2006.
"The Measurement of Central Bank Autonomy: Survey of Models, Indicators, and Empirical Evidence ,"
IMF Working Papers
06/227, International Monetary Fund.
[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!]
Martin Cincibuch & Tomas Holub & Jaromir Hurnik, 2008.
"Central Bank Losses and Economic Convergence ,"
Working Papers
2008/3, Czech National Bank, Research Department.
[Downloadable!]
Other versions: Miguel A. Kiguel & Alain Ize & Eduardo Levy Yeyati, 2005.
"Managing Systemic Liquidity Risk in Financially Dollarized Economies ,"
IMF Working Papers
05/188, International Monetary Fund.
[Downloadable!]
Alain Ize & Miguel Kiguel & Eduardo Levy Yeyati, 2005.
"Managing Systemic Liquidity Risk in Financially Dollarized Economy ,"
Business School Working Papers
managsystrisk, Universidad Torcuato Di Tella.
[Downloadable!]
Marcel Peter & Geoffrey Heenan & Scott Roger, 2006.
"Implementing Inflation Targeting: Institutional Arrangements, Target Design, and Communications ,"
IMF Working Papers
06/278, International Monetary Fund.
[Downloadable!]
Ake Lonnberg & Peter Stella, 2008.
"Issues in Central Bank Finance and Independence ,"
IMF Working Papers
08/37, International Monetary Fund.
[Downloadable!]
Thomas F. Cargill, 2006.
"Central bank capital, financial strength, and the Bank of Japan ,"
FRBSF Economic Letter ,
Federal Reserve Bank of San Francisco, issue May 19.
[Downloadable!]
Alain Ize, 2006.
"Spending Seigniorage: Do Central Banks Have a Governance Problem? ,"
IMF Working Papers
06/58, International Monetary Fund.
[Downloadable!]
Ulrich H. Klueh & Peter Stella, 2008.
"Central Bank Financial Strength and Policy Performance: An Econometric Evaluation ,"
IMF Working Papers
08/176, International Monetary Fund.
[Downloadable!]
Nada Oulidi & Alain Ize, 2009.
"Why Do Central Banks Go Weak? ,"
IMF Working Papers
09/13, International Monetary Fund.
[Downloadable!]
Peter Stella & Åke Lonnberg, 2008.
"Issues in central bank finance and independence ,"
Working Paper
2008-13, Federal Reserve Bank of Atlanta.
[Downloadable!]
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