How will Covid-19 hit central banks’ financial results?
The crisis has affected central bank incomes from seigniorage and other sources. But by how much?
The economic fallout from the Covid-19 pandemic – as witnessed during previous crises – has had an important influence on the money creation process and the seigniorage booked into the financial results of central banks. Seigniorage is profit stemming from currency issuance, or – more technically – the net income of a central bank that results from its monopoly over cash.
Determining the impact of seigniorage on central bank profits is not trivial when using traditional methods. As a result, we
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