The loss was expected. Other central banks in the eurozone are also posting losses worth billions. This is a consequence of the monetary policy of the European Central Bank. During the corona crisis, central banks bought debt securities en masse at low interest rates. That interest rate has now risen, meaning that central banks have to pay more to regular banks that park their money at the central bank.
The loss is mainly the result of a sharp decline in net interest income (more than 4.6 billion euros).
The National Bank does have reserves from which it can draw. And there are even central banks that operate with negative reserves.
Despite the loss, ordinary shareholders still receive a (small) dividend of 1.5 euros per share. There is worse news for the government. Normally, as a privileged shareholder, he can count on several hundreds of millions of euros in dividends to supplement the state coffers, but not now.
It is expected that the NBB will continue to suffer heavy losses in the coming years. Over a time horizon of 5 years, there is a cumulative loss of 6.1 billion euros. However, that scenario is still very uncertain.
Tags: Bad news treasury billion euros loss National Bank Economy
