BIS: 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.