But sustained loss and diminution of equity, or a very large, even if exceptional, negative income (P&L) impact on public finances is likely to erode the institution’s credibility and policy freedom. Governments are beneficial owners2 of central banks, and conceptually the central bank’s cash flows and the equity investment in the central bank can be consolidated into broader whole-of-government finances.
Louis Kasekende: Uganda’s financial sector at 50 – achievements, challenges and expectations for the future Speech by Dr Louis Kasekende, Deputy Governor of the Bank of Uganda, at the Uganda Institute of Banking and Financial Services Annual Dinner, Kampala, 1 March 2013.