Can Central Banks Go Broke?

Buiter, Willem H.

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Can Central Banks Go Broke?

CEPR Policy Insight No. 24, May 2008

12 Pages Posted: 10 Sep 2014

See all articles by Willem H. Buiter

Willem H. Buiter

Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Columbia University; Independent Economic Adviser; Independent

There are 2 versions of this paper

Date Written: May 1, 2014

Abstract

The paper answers three questions.

(1) Does it matter if a central bank suffers a large capital loss?

(2) Can the central bank become insolvent?

(3) When, how and by whom should the central bank be recapitalised?

Keywords: Seigniorage, central bank independence, monetary financing, base money

JEL Classification: E42, E50, E58, E52, E59, H27, H11, H63

Suggested Citation: Suggested Citation

Buiter, Willem H., Can Central Banks Go Broke? (May 1, 2014). CEPR Policy Insight No. 24, May 2008, Available at SSRN: https://ssrn.com/abstract=2489665