Central bank equity: facts and analytics

How much capital should the central bank of a country hold? There is no consensus on this matter. We review balance sheets 45 banks from around world to describe actual practices. The principal findings are: (a) average capital-asset ratio globally (net revaluation which purely an accounting entry) 6.56 percent while number in emerging economies 6.96 percent; and (b) our Value-at-Risk estimates for RBI excluding exchange rate risk indicate that current level core as mandated by Jalan committee may be too low. also discuss policy moral hazards associated with mandating equity payouts government.