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Should we care about central bank profits?

Author

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  • Francesco Chiacchio
  • Grégory Claeys
  • Francesco Papadia

Abstract

Central banks are not profit-maximising institutions; their objectives are rather of macroeconomic nature. The European Central Bank’s overriding objective is price stability. Nevertheless, there are three good reasons to conclude that it is preferable for central banks to achieve profits rather than to record losses. First, taxpayers endow central banks with large amounts of resources and one should be worried if this amount of resources did not produce any income....

Suggested Citation

  • Francesco Chiacchio & Grégory Claeys & Francesco Papadia, 2018. "Should we care about central bank profits?," Policy Contributions 27096, Bruegel.
    • Handle: RePEc:bre:polcon:27096
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    Cited by:

    1. Matteo Bonetti & Dirk Broeders & Damiaan Chen & Daniel Dimitrov, 2024. "Central Bank Capital and Shareholder Relationship," Working Papers 809, DNB.
    2. Paul De Grauwe, 2021. "Inflation Risk?," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 56(4), pages 220-222, July.
    3. Zsolt Darvas, 2018. "Forecast errors and monetary policy normalisation in the euro area," Policy Contributions 28816, Bruegel.
    4. van Riet Ad, 2019. "Twenty Years of European Central Bank Monetary Policy: A Keynesian and Austrian Perspective," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(5-6), pages 797-840, October.
    5. Igor Ljubaj, 2020. "International Reserves, Exchange Rate Differences and the CNB’s Financial Result," Surveys 38, The Croatian National Bank, Croatia.
    6. De Grauwe, Paul, 2021. "Inflation risk?," LSE Research Online Documents on Economics 111810, London School of Economics and Political Science, LSE Library.
    7. Jan Priewe, 2021. "Reforming the Fiscal Rulebook for the Euro Area – and the Challenge of Old and New Public Debt," IMK Studies 72-2021, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.

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