The German Federal Bank (Bundesbank) has suffered financial losses for the first time since 1979, amounting to EUR 19.2 billion at the end of 2024, the institute said in a statement.
Losses of this magnitude have never been recorded in the history of the Bundesbank, which was founded in 1957.
Last year, the Bundesbank reported a loss for the first time since 1979. The balance sheet shows a deficit of around EUR 19.2 billion. This is the biggest loss in the history of the Deutsche Bundesbank, the central bank announced.
This means that the federal budget will once again miss out on unexpected financial gains - as it did in the previous four years, Sueddeutsche.de recalls. For years, the Federal Ministry of Finance had planned for the Bundesbank to make a profit of EUR 2.5 billion in the federal budget. In 2019, then-Finance Minister Olaf Scholz (SPD) was able to celebrate the Bundesbank's highest profit since the financial crisis: EUR 5.85 billion. The last loss on the balance sheet occurred 45 years ago: in 1979, the Bundesbank reported a deficit of just over EUR 2.9 billion.
The burden of the rapid interest rate reversal had already almost swallowed up the Bundesbank's billions in provisions by 2023. For 2024, the Bundesbank will therefore have only EUR 0.7 billion in reserves to cushion the losses. Although the interest result improved slightly, it was still significantly negative at around EUR 13.1 billion (previous year: EUR 13.9 billion). Red numbers are likely to remain on the balance sheet in the coming years, although the Bundesbank estimates that losses will be lower than in 2024.
Since the summer of 2022, the European Central Bank (ECB) has been rapidly raising interest rates in the euro area to rein in high inflation. Inflation is now far from record levels, which is why the ECB has again lowered key interest rates in the euro area. Higher interest rates on financial markets have led to an increase in interest costs for central banks, which interest income has not been able to support. At the same time, many long-term securities such as government and corporate bonds, which the European central banks have been buying on a large scale for years as part of the common monetary policy, yield relatively low interest rates.
The ECB is also losing money
The ECB itself reported its second consecutive year of losses in 2024. and the highest loss in its more than 25-year history: a good 7.9 billion euros. Thus, the usual distribution of the ECB's profits - including to the Bundesbank - was once again canceled.
Bundesbank Vice President Sabine Mauderer emphasized the solidity of the Bundesbank's balance sheet: “The Bundesbank can bear both current and expected financial burdens.“ For example, the Bundesbank's gold reserves have become significantly more valuable due to the increased price of the precious metal. The Bundesbank's total gold and foreign currency reserves were valued at just over 267 billion euros at the end of last year - compared to just over 197 billion euros a year earlier.
The main goal of central banks is not to make a profit. The ECB and, together with it, the national central banks in the Eurosystem bear the primary responsibility for ensuring stable prices and therefore a stable currency in the currency area of 20 countries.