Why Do Central Banks Go Weak?

January 1, 2009

Preview Citation

Format: Chicago

Nada Oulidi, and Alain Ize. Why Do Central Banks Go Weak?, (USA: International Monetary Fund, 2009) accessed July 10, 2025

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Determinants of central banks' profitability are studied using a statistical analysis of their balance sheets, country characteristics, and the macroeconomic and institutional environments in which they operate. Central banks at both tails of the distribution of profits generally operate in poorer countries with more troubled macroeconomic and institutional environments. For these central banks, profitability is strongly influenced by fiscal dominance and, to a lesser extent, by how actively central banks used their balance sheet for monetary policy purposes.

Subject: Bank deposits, Banking, Central bank balance sheet, Financial statements, Personal income

Keywords: Balance sheet, Central bank, Income, Profitability, Strong central bank, Weak central bank, WP

Publication Details

Pages:

19
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2009/013
Stock No:

WPIEA2009013
ISBN:

9781451871609
ISSN:

1018-5941

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