Pérdidas históricas del BCE: 8.000 millones de euros sólo en 2024

Summary

In 2024, the European Central Bank (ECB) faced significant losses of €8 billion, a result of its monetary policies, particularly Quantitative Easing (QE). While QE initially boosted profits by purchasing low-interest government bonds, the shift to higher interest rates in 2022 led to a devaluation of these assets and increased costs in remunerating bank reserves. This has caused a reversal of profit flows into losses. Despite expectations of reduced losses in the future, the financial burden ultimately falls on national governments and taxpayers, continuing a cycle of gains and losses tied to the ECB's policies.

Takeaways

• 😀 The European Central Bank (ECB) experienced losses of 8 billion euros in 2024, following similar losses in 2023, totaling over 15 billion euros in two years.
• 😀 Central banks, like the ECB, are typically profitable due to their role in issuing fiat currency, but losses can occur under certain economic conditions.
• 😀 The main cause of ECB's losses is its previous quantitative easing (QE) policies, where they bought financial assets like government bonds, generating profits from the difference in interest rates.
• 😀 With QE, central banks bought long-term debt yielding interest while paying no interest on the base money they issued, leading to significant profits during low interest rates.
• 😀 The ECB's profit model during QE was based on buying assets with returns higher than the cost of base money, but this changed when interest rates began rising.
• 😀 In 2022, the ECB shifted to a restrictive monetary policy to combat inflation, leading to increased financial costs due to higher interest payments on bank reserves.
• 😀 As the ECB raised interest rates, the cost of paying interest on reserves to commercial banks became greater than the income from its long-term bond holdings, leading to losses.
• 😀 The ECB's losses are expected to continue, albeit at a reduced rate, as long as interest rates remain high and the yield on its assets remains lower than the cost of paying for reserves.
• 😀 Even with falling interest rates, the ECB will continue to face losses due to the mismatch between the high interest paid on reserves and low yields on older assets bought during QE.
• 😀 Ultimately, the losses the ECB incurs will be passed onto national governments, as the central bank’s profits (or losses) are distributed according to the capital shares of each member state.

Q & A

What were the financial losses of the European Central Bank (ECB) in 2024?

The ECB reported financial losses of 8 billion euros in 2024, following a similar loss of 7.8 billion euros in 2023.

Why are the losses of the European Central Bank significant?

The losses are significant because the ECB typically generates profits, which are distributed to European states. These losses indicate the ECB is facing financial difficulties due to its monetary policies.

What is quantitative easing (QE) and how did it affect the ECB's finances?

Quantitative easing is a monetary policy where central banks buy financial assets, mainly government debt, using non-interest-bearing money. During its use, it was profitable for the ECB as it generated returns from interest on the assets bought. However, the rise in interest rates has made this policy financially burdensome, leading to losses.

What is the impact of rising interest rates on the ECB's financial situation?

As interest rates rise, the ECB has to pay higher interest on reserves held by private banks, which increases its costs. Meanwhile, the returns on the long-term assets the ECB purchased during periods of lower interest rates have declined, resulting in significant financial losses.

What does the term 'base money' refer to in the context of the ECB's monetary policy?

Base money refers to the non-interest-bearing money issued by the ECB, which is used to buy financial assets like government debt. It is a liability for the ECB, but it does not pay interest, making it less costly compared to other forms of monetary issuance.

How did the ECB profit from quantitative easing in previous years?

The ECB profited from quantitative easing by purchasing long-term financial assets, such as government debt, which provided returns. These returns were higher than the non-interest-bearing base money issued by the ECB, leading to a profit from the interest rate spread.

What does the ECB expect regarding its financial losses in the coming years?

The ECB expects that its financial losses will continue, though they may be less severe than in 2023 and 2024. However, losses are still anticipated due to the ongoing disparity between the interest paid on reserves and the returns from its long-term assets.

What role do national governments play in the ECB's financial losses?

National governments ultimately bear the cost of the ECB's losses. The ECB's profits or losses are distributed to member states based on their share of the bank's capital, meaning taxpayers across the Eurozone will absorb the financial impact.

Why are some voices within the ECB cautious about further reducing interest rates?

Some voices within the ECB are cautious about further lowering interest rates because they believe inflation is not entirely under control in the Eurozone. Lowering interest rates further might undermine the ECB's credibility in managing inflation in the long term.

What challenges does the ECB face in balancing monetary policy and economic stability?

The ECB faces the challenge of balancing the need to control inflation with the financial sustainability of its operations. Lowering interest rates too much can lead to inflationary pressures, while maintaining high rates increases financial costs and causes losses on assets purchased during periods of lower rates.