Why are central banks reporting losses? Does it matter?

Key takeaways

• Rising interest rates are reducing profits or even leading to losses at some central banks, especially those that purchased domestic currency assets for macroeconomic and financial stability objectives.
• Losses and negative equity do not directly affect the ability of central banks to operate effectively.
• In normal times and in crises, central banks should be judged on whether they fulfil their mandates.
• Central banks can underscore their continued ability to achieve policy objectives by clearly explaining the reasons for losses and highlighting the overall benefits of their policy measures.

The views expressed in this publication are those of the authors and not necessarily those of the BIS.