Spending Seigniorage: Do Central Banks Have a Governance Problem?
IMF Working Papers, March 1, 2006
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- Spending Seigniorage: Do Central Banks Have a Governance Problem?
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Bibliographic details
- Authors: Alain Ize
- Published: March 1, 2006
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451863185.001
Main objective and approach
- Reviews how central banks allocate seigniorage based on systematic crosscountry comparisons of their financial accounts.
- Classifies central banks as "weak or strong" depending upon their structural profitability.
Characteristics of weak central banks
- Typically (although not exclusively) operate in smaller and less wealthy countries.
- Lack independence from their governments.
- Are burdened by compulsory transfers and low capital.
- Exhibit high:
- operating expenditures,
- nonperforming assets,
- international reserve carrying costs,
- international reserve accumulation needs.
Governance findings
- Governance appears to be a potential concern in many central banks, both weak and strong.
- Observed behavioral patterns:
- Operating expenditures often adjust upward for high profitability.
- Capital accumulation often adjusts downward for low profitability.
Policy implications (briefly reviewed)
- The paper briefly reviews the main policy implications arising from the findings on seigniorage allocation, structural profitability, and governance concerns.
Publication metadata (selected)
- Author: Alain Ize
- Date: March 1, 2006
- Series: IMF Working Papers
- Issue: 058
- Pages: 34
- DOI: https://doi.org/10.5089/9781451863185.001
Source: Spending Seigniorage: Do Central Banks Have a Governance Problem?, IMF Working Paper by Alain Ize, March 1, 2006.