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175 years of financial risks and returns in central banking: Danmarks Nationalbank, 1839–2014

  • Kim Abildgren (a1)

This article explores long-term trends in risks and returns within central banking using Danmarks Nationalbank as a case study. Core earnings generated by the basic functions and the associated risks typical of a central bank accounted on average for most of the Nationalbank's financial returns over the past 175 years. For a long period, this was the result of a passive risk-management strategy under which financial risks and returns just reflected the various functions performed by the Nationalbank and not the outcome of a deliberate decision-making process. A formalised and holistic risk-management framework was introduced only in the 1990s.

Corresponding author
K. Abildgren, Danmarks Nationalbank, Havnegade 5, DK-1093 Copenhagen K, Denmark; email:; personal website: .
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The author wishes to thank the editor, two anonymous referees and various colleagues from Danmarks Nationalbank for useful comments on preliminary versions of this article. Views and conclusions expressed are those of the author and do not necessarily represent those of Danmarks Nationalbank. The author alone is responsible for any remaining errors.

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Financial History Review
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