Central bank profits may not be critical but still a good sign

FRANKFURT: There are good reasons why central banks should think about profit as well as monetary policy, according to a new study.

Financial strength can help monetary institutions fulfill their mandates and indicate the success of individual policies, Francesco Chiacchio, Gregory Claeys and Francesco Papadia write in a paper published yesterday by Brussels-based think tank Bruegel. Central-bank income also presents a revenue source for governments, a factor that’s gained interest since the European Commission proposed earlier this year setting up a rainy-day fund using that money.