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Central Bank Balance Sheet and Policy Implications

Author

Listed:
  • Pornpinun Chantapacdepong

    (Bank of Thailand)

  • Nuttathum Chutasripanich

    (Bank of Thailand)

  • Bovonvich Jindarak

    (Bank of Thailand)

Abstract

Recently, weak central bank financial positions, especially of emerging economies, have brought into the public spotlight whether it will constrain or obstruct the policy implementation in the long run or not. The country case studies and statistical performance showed that the central bank capital erosion does not directly relate to the policy effectiveness, but it creates the vulnerabilities to the monetary policy process. The key factor helping achieve the policy objectives, even with the losses or negative capital is “central bank credibility”. The policy choices to reduce such vulnerabilities are also discussed in this paper.

Suggested Citation

  • Pornpinun Chantapacdepong & Nuttathum Chutasripanich & Bovonvich Jindarak, 2012. "Central Bank Balance Sheet and Policy Implications," Working Papers 2012-07, Monetary Policy Group, Bank of Thailand.
  • Handle: RePEc:bth:wpaper:2012-07
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    File URL: https://www.bot.or.th/Thai/MonetaryPolicy/ArticleAndResearch/DiscussionPaper/dp072012.pdf
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    References listed on IDEAS

    as
    1. Chortareas, Georgios & Stasavage, David & Sterne, Gabriel, 2002. "Monetary Policy Transparency, Inflation and the Sacrifice Ratio," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 7(2), pages 141-155, April.
    2. Gustavo Adler & Pedro Castro & Camilo Tovar, 2016. "Does Central Bank Capital Matter for Monetary Policy?," Open Economies Review, Springer, vol. 27(1), pages 183-205, February.
    3. Axel Löffler & Gunther Schnabl & Franziska Schobert, 2010. "Inflation Targeting by Debtor Central Banks in Emerging Market Economies," CESifo Working Paper Series 3138, CESifo Group Munich.
    4. Martin Cincibuch & Tomáš Holub & Jaromír Hurník, 2009. "Central Bank Losses and Economic Convergence," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 59(3), pages 190-215, August.
    5. Ehrmann, Michael & Fratzscher, Marcel, 2007. "Social value of public information: testing the limits to transparency," Working Paper Series 821, European Central Bank.
    6. Maxwell J. Fry, 1993. "The Fiscal Abuse of Central Banks," IMF Working Papers 93/58, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Central Bank Balance Sheet and Policy Implications;

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications

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