Why are central banks reporting losses? Does it matter?

BIS Bulletin  |  No 68  | 
07 February 2023

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.