Central banks should be independent of government. But our research shows they are under political pressure

The Bank of England Lois GoBe/Shutterstock

In 2023, central banks, which manage the monetary policy of a country, faced unprecedented financial losses – the US Federal Reserve alone reported a record US$114.3 billion (£86 billion) operating loss.

Losses like this have become increasingly common, with 40% of central banks in developed countries recording deficits in 2023 (see the graph below). This made 2022 and 2023 the worst years in recent history.