Why Do Central Banks Go Weak?

Author/Editor:

Nada Oulidi ; Alain Ize

Publication Date:

January 1, 2009

Electronic Access:

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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.

Series:

Working Paper No. 09/13

Subject:

Bank soundness Central banking Central banks Cross country analysis Economic models Fiscal analysis Fiscal dominance Fiscal management Profits

English

Publication Date:

January 1, 2009

ISBN/ISSN:

9781451871609/1018-5941

Stock No:

WPIEA2009013

Format:

Paper

Pages:

19

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