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Abstract

The net income of central banks, called seigniorage, is the difference between the return received on assets and the sum paid on liabilities. The latter is generally small since a large part of liabilities comprises banknotes in circulation that bear no return. After operating costs have been deducted and provisions for reserves made, seigniorage is usually transferred to the government and constitutes an additional source of budgetary revenue.

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© 2000 Lorenzo Bini Smaghi and Daniel Gros

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Smaghi, L.B., Gros, D. (2000). Who gets the seigniorage?. In: Open Issues in European Central Banking. Palgrave Macmillan, London. https://doi.org/10.1057/9780333981887_5

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