When Money is Equity for its Issuer: Message to the Central Banks

This article revisits the Accounting View of Money (AVM), which challenges the conventional treatment of money as debt. Drawing on revised international accounting standards and expert feedback, it argues that central bank money—and part of commercial bank deposits—should be classified as equity under a dedicated balance-sheet subcategory. The study refines the conceptual framework, distinguishes between primary and secondary seigniorage, and empirically applies the AVM to the UK (2007–2016). Results reveal significant unrecognized seigniorage and misrepresentation in financial reporting, with important implications for central bank capital, monetary policy credibility, and the transparency of money issuance.