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Europe > Iceland

You are looking at 1 - 4 of 4 items for :

  • Type: Journal Issue x
  • Central banks x
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Cover IMF Working Papers
Central Bank Financial Strength, Transparency, and Policy Credibility
Mr. Peter Stella
A central bank is financially strong if it possesses resources sufficient to attain its fundamental policy objective(s). Once endowed with those resources, relations between government and central bank should be designed so that significant changes in central bank financial strength do not occur unless necessitated by changes in policy objectives. The level of strength required depends on the array of policy objectives (for example, the exchange rate regime) as well as the constraints and risks presented by the operational environment. Attaining credibility is facilitated if the public can easily determine the financial strength of the bank, yet for a variety of reasons this is often difficult. Transparency requires institutional arrangements that ensure the central bank generates profit in most states of the world, is subject to strict ex post independent audit, and transfers regularly all profits, after provisions, to the treasury.
Keywords:
WP; central bank loss; monetary policy; foreign exchange; rate of inflation; Central bank losses; transparency; credibility; policy objective; profit determination; policy capability; Financial statements; Inflation; International reserves; Central bank legislation; Australia and New Zealand
Cover IMF Working Papers
Some Issues in the Design of Monetary Instruments for the Operation of European Economic and Monetary Union
Mr. Paul Louis Ceriel Hilbers
,
Mr. Arto Kovanen
, and
Mr. Charles Enoch
The European Monetary Institute has been working with national central banks of the European Union (EU) to prepare instruments for the operation of monetary policy in Stage 3 of European Economic and Monetary Union. Several publications describing the proposed arrangements have been issued. This paper briefly summarizes the arrangements and identifies some areas in which important decisions still have to be made or refinements introduced—including the choice of counterparties in fine-tuning open market operations; the design of reserve requirements; the signaling function of monetary operations; and payment system relationships with non-EMU participants in the EU.
Keywords:
WP; interest rate; ECB statute; financial institution; NCBs; asset; monetary policy; Monetary Operations; EMU; ECB state; ESCB monetary policy operations; ECB operating procedures; ECB approval; credit operation; ECB payment mechanism; Credit; Reserve requirements; Market interest rates; Standing facilities; Open market operations; Europe
Cover IMF Working Papers
Do Central Banks Need Capital?
Mr. Peter Stella
Central banks may operate perfectly well without capital as conventionally defined. A large negative net worth, however, is likely to compromise central bank independence and interfere with its ability to attain policy objectives. If society values an independent central bank capable of effectively implementing monetary policy, recapitalization may become essential. Proper accounting practice in determining central bank profit or loss and rules governing the transfer of the central bank’s operating result to the treasury are also important. A variety of country-specific central bank practices are reviewed to support the argument.
Keywords:
WP; central bank capital; monetary policy; distribution rule; profit and loss account; interest income; profit transfer; transfer policy; market value; transfers profits; profit payment; debt issuance; profit distribution rule; central bank loss; central bank solvency; Financial statements; Commercial banks; Fiscal accounting and reporting; Currencies; Central bank accounting; Baltics
Cover IMF Working Papers
Monetary Indexation and Revenues from Money Creation: The Case of Iceland
International Monetary Fund
This paper discusses the effects of monetary indexation on the revenues from monetization in Iceland. The paper starts by showing that monetization revenues fell sharply after indexation was introduced in 1979 and evaluates the different and partly ambiguous factors behind this development. The fiscal consequences are then examined in light of the fact that revenues from monetization have traditionally made up a substantial part of Government revenues in Iceland. Different policy options are simulated using the framework of the public finance approach to inflation. The simulations focus on the relation of fiscal deficits to inflation, output growth, and internal and external debt.
Keywords:
WP; demand; interest rate; economic growth; monetary indexation; revenues from money creation; indexation scenario; financiable deficit; indexation period; inflation tax revenue; public finance; case of indexation; indexation of base money; indexation of financial assets; Switching-term deposit; Inflation; Currency issuance; Real interest rates; Monetary base; Demand for money