The ECB Explains Why Central Banks Can't Go Bankrupt in a Footnote
They cannot run out of that which they create.
The words "a bankrupt man's eyes" written by artist Nedko Solakov adorn a wall in the atrium of the European Central Bank (ECB) headquarters in Frankfurt, Germany, on Wednesday, Oct. 21, 2015.
Photographer: Martin Leissl/BloombergThis article is for subscribers only.
This morning the European Central Bank published a research paper titled "Profit distribution and loss coverage rules for central banks."
The paper dryly outlines how central banks account for profits and losses, and how those profits and losses are distributed to the shareholders of those central banks—usually the state in which they are based.