tag:blogger.com,1999:blog-6297413898275266606.post1096266711168686996..comments2024-03-27T18:15:59.096+08:00Comments on Economics Malaysia: Central Banks Can’t Go Bankrupthishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-6297413898275266606.post-90486456910575624752017-10-06T18:14:08.010+08:002017-10-06T18:14:08.010+08:00Hafiz, I don't think you're thinking clear...Hafiz, I don't think you're thinking clearly on this. HOW they pay is almost irrelevant to my post.<br /><br />For example, assuming the losses were due to a shift in some of the reserve holdings from USD to GBP, all the losses would be purely on paper, and no payment would be required. It would appear as a drop in FX reserve valuation, with the paper loss booked to the P&L. If it washishamhhttps://www.blogger.com/profile/06265308095732759923noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-45331200029891466342017-10-06T16:16:11.245+08:002017-10-06T16:16:11.245+08:00On #2, I feel money printing re: FX reserves is di...On #2, I feel money printing re: FX reserves is different from debt monetization money printing in the sense that the former would go to buying other assets, i.e. foreign currencies. At the end of the day, the liability (the money printed) is backed/linked by foreign currency assets.<br /><br />Because of that, I'd separate such money printing from debt monetization-style printing. Debt Hafiz Noor Shamshttp://maddruid.comnoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-26609934869256623752017-10-06T14:51:49.580+08:002017-10-06T14:51:49.580+08:00@Hafiz
On the equity question: first, startup cos...@Hafiz<br /><br />On the equity question: first, startup costs, and second, for credibility especially at the initial stages. Afterwards, its pretty much not necessary, especially since most central banks remit most of their profits to finance ministries anyway.<br /><br />On your other points:<br /><br />1. I'd point out that quite a few central banks have and continue to operate with hishamhhttps://www.blogger.com/profile/06265308095732759923noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-47052995523216894052017-10-06T12:03:09.330+08:002017-10-06T12:03:09.330+08:00I wish I had proofread this. But well...I wish I had proofread this. But well...Hafizhttp://maddruid.comnoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-73529036103293444542017-10-06T11:57:22.734+08:002017-10-06T11:57:22.734+08:00Under the understanding that CB can never go under...Under the understanding that CB can never go under, why would they need any equity in the first place? From that perspective, equity feels meaningless, being a mere accounting formality.<br /><br />On a different point, I think BNM preference for amortization instead of money printing may have to do with human preference/culture/bias, that losses are looked at very unfavourably. BNM had a public Hafizhttp://maddruid.comnoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-63436389655173318072017-10-05T10:07:30.886+08:002017-10-05T10:07:30.886+08:00But Malaysians back then were more pliable back th...But Malaysians back then were more pliable back then. Clearly the administration at the time can just divert any questions about the loss easily.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-14239192798606613682017-10-05T09:49:03.544+08:002017-10-05T09:49:03.544+08:00I could point out to only one reason. It would be ...I could point out to only one reason. It would be a political suicide for the government to allow BNM doing that. Anonymoushttps://www.blogger.com/profile/00609336531684787074noreply@blogger.com