Losses occurred because of a default of one of their counterparties or an issuer of a security they hold in their portfolio can deplete their financial buffers.
Although their financial survival does not depend in any vital way on such buffers, their perceived lack of financial resources could irrevocably damage their credibility in the market and thus their ability to implement monetary policy and safeguard financial stability. Furthermore, if a recapitalisation of the central bank by the government becomes ultimately necessary, it could jeopardise the independence of the monetary authority.