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A central bank operates within a framework of rules that, among other things, allow it to operate as a central bank. If those rules require it to raise capital
by unyttigfjelltol 4y ago
A central bank operates within a framework of rules that, among other things, allow it to operate as a central bank. If those rules require it to raise capital before continuing to operate, and the capital cannot be raised, it is effectively bankrupt.
- orangepurple 4y agoCentral banks can freely create capital if necessary. They can generate anything they want because they are sovereign. The people are de-facto forced to utilize currency the central bank issues to pay taxes in that same currency. Without this system state run currencies would fail.