Central Bank Financial Strength, Transparency, and Policy Credibility

By P. Stella. Social Science Research Network, 2002

122 citations recorded by the source corpus.

Although rarely acknowledged explicitly, the financial strength of an independent and credible central bank must be commensurate with its policy tasks and the risks it faces. This paper explores the relationship between central bank financial strength and policy outcomes, stressing the importance of financial independence as a fundamental support to policy credibility. The attributes of an adequate central bank capital policy are discussed and implications drawn for the appropriate way in which central banks ought to be recapitalized. Reasons why this issue has not been clearly analyzed in the past-primarily owing to idiosyncratic and obscure central bank accounting-are also presented.

Subfields: Accounting, Finance, Information Systems

View Paper: https://www.semanticscholar.org/paper/5d3799718901a5e48c1b5963676bddf2691cf469

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. A. Cukierman

In Finance

1. A. Cukierman
2. P. Geraats
3. Sylvester C. W. Eijffinger
4. Katrin Assenmacher-Wesche

In Information Systems

1. A. Cukierman

Citations in the corpus

• Reflections on the Crisis and on its Lessons for Regulatory Reforms and for Central Bank Policies (2011, unknown): “Further discussions of those and related issues appear in Stella (2005) and Cukierman (Forthcoming)).”
• Credible Commitment to Optimal Escape from a Liquidity Trap: The Role of the Balance Sheet of an Independent Central Bank (2004, unknown): “Stella [17] and [18] provide a broader discussion of the role of central banks capital. economy may fall into a liquidity trap with excessively low output and in ation as a result of an unanticipated fall in expected productivity growth and a related fall in the natural interest rate.3”
• Central Bank Independence and Monetary Policymaking Institutions - Past Present and Future (2008, background): “An enlightening discussion of those issues appears in Stella (2005).”