Do central banks pay their staff and other costs with money that they create?

Question

Central banks like the Bank of England and the Fed must cover their costs. I was wondering how they do this? I can think of two possible mechanisms:

Government allocates money from its tax revenue to the central bank, which then uses this money to cover costs.
The central bank creates an amount of money necessary to cover its costs.

This question is specifically about central banks as they alone have the authority to create new money.

You can easily find the Bank of England's annual accounts - it does not use either method — Henry, Nov 19 '19 at 00:26
Possible duplicate of How does a bank create new money when it pays its own staff? — , Nov 19 '19 at 01:07
@KennyLJ This is about central bank though... so the answer might be different? — Art, Nov 19 '19 at 01:58
@Henry Is it your understanding from the annual accounts that the costs are all funded out of central bank profits? — Barnaby Golden, Nov 19 '19 at 17:21
Yes, they are. And in the US at least, if profits did not exceed costs, they’d be funded by the Treasury. — dismalscience, Nov 19 '19 at 17:33
Indeed the Fed does, at least during a contingency. During the US government shut-down of 2018-2019, the Fed did not shut down and its staff continued to be paid, using coupon payments from its QE portfolio. — Michael, Nov 20 '19 at 03:39
@Michael could you provide source for this? Not that I dont believe you but I find it interesting and would want to know more about this. I tried to google it but could not find it probably using wrong key words — 1muflon1, Nov 26 '19 at 23:10

score 2 · Accepted Answer · answered Jan 14 '22 at 20:59

In general, central banks are profitable because they hold a portfolio of interest bearing assets (government bonds) against non-interest bearing liabilities (currency).

A central bank's revenue is generally more than enough to pay for its staff and other costs, leaving some left over to remit to the national government.

In 2020, the Bank of Canada had almost \$2.6 billion in revenue against about \$0.6 billion in costs leaving a net income of about \$2 billion. As you can see in their financial results here: https://www.bankofcanada.ca/publications/annual-reports-quarterly-financial-reports/annual-report-2020/financial-results/

Do central banks pay their staff and other costs with money that they create?

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