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Ztráta centrální banky - účetní a ekonomický pohled na příkladě České národní banky
[Central bank Losses. An Economic and Accounting Perspective Using the Example of the Czech National Bank]

Author

Listed:
  • Martin Mandel
  • Vladimír Zelenka

Abstract

The first question that we ask ourselves in our article is whether the accounting of the central bank is supposed to respect the principles of internationally accepted standards (especially the International Financial Reporting Standards). We are looking for the basic differences in understanding of terms such as (il)liquidity and (in)solvency on the level of central and commercial banking. We analyze the economic reasons for origination of the long foreign exchange position of the ČNB which, under the circumstances of trend appreciation of the exchange rate of the Czech crown, is leading to a cumulative loss. We are discussing whether the current level of foreign exchange reserves of the ČNB is excessive or adequate. Special attention is paid to the monetary and financial impact of the loss of the central bank. We are pointing out that losing the central bank means profit for market subjects at the same time. It is not just a "fictitious" accounting problem and it can have its factual impact on the national economy. At the end we are summarizing and assessing the individual opinions regarding the loss of the ČNB.

Suggested Citation

  • Martin Mandel & Vladimír Zelenka, 2009. "Ztráta centrální banky - účetní a ekonomický pohled na příkladě České národní banky
    [Central bank Losses. An Economic and Accounting Perspective Using the Example of the Czech National Bank]
    ," Politická ekonomie, University of Economics, Prague, vol. 2009(6), pages 723-739.
  • Handle: RePEc:prg:jnlpol:v:2009:y:2009:i:6:id:706:p:723-739
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    References listed on IDEAS

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    1. Peter Stella, 2002. "Central Bank Financial Strength, Transparency, and Policy Credibility," IMF Working Papers 02/137, International Monetary Fund.
    2. Egert, Balazs & Komarek, Lubos, 2006. "Foreign exchange interventions and interest rate policy in the Czech Republic: Hand in glove?," Economic Systems, Elsevier, vol. 30(2), pages 121-140, June.
    3. Peter Stella, 1997. "Do Central Banks Need Capital?," IMF Working Papers 97/83, International Monetary Fund.
    4. Åke Lönnberg & Peter Stella, 2008. "Issues in Central Bank Finance and Independence," IMF Working Papers 08/37, International Monetary Fund.
    5. Kenneth Sullivan, 2005. "Transparency in Central Bank Financial Statement Disclosures," IMF Working Papers 05/80, International Monetary Fund.
    6. John Hawkins, 2003. "Central bank balance sheets and fiscal operations," BIS Papers chapters,in: Bank for International Settlements (ed.), Fiscal issues and central banking in emerging economies, volume 20, pages 71-83 Bank for International Settlements.
    7. Peter Stella & Åke Lonnberg, 2008. "Issues in central bank finance and independence," FRB Atlanta Working Paper 2008-13, Federal Reserve Bank of Atlanta.
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    Citations

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    Cited by:

    1. Jaroslava Durčáková, 2011. "Foreign Exchange Rate Regimes and Foreign. Exchange Markets in Transitive Economies," Prague Economic Papers, University of Economics, Prague, vol. 2011(4), pages 309-328.

    More about this item

    Keywords

    monetary policy; foreign exchange reserves; central banking; financial statements;

    JEL classification:

    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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