Central banking 18: Governor and board members are trustees and not owners of the central bank

March 30, 2015

A central bank can earn its living by printing money
A central bank is a unique species. It does not have to work in order to earn its existence. This is because it has been given a power which no one else in society has. That power is to have all the resources it wants just by assuming a liability through a mere book entry.
For instance, suppose it wants to lend to the government by buying a Treasury bill. All it has to do is to debit a Treasury bill holding account in its books and debit that account and credit the value it has lent to the government to the government’s deposit account which it maintains in its books.

Central Banking 18 Governor and Board Members Are Trustees and Not Owners of the Central Bank by Thavam Ratna