The ECB loses almost 8,000 million in 2024, the largest ‘red numbers’ in its history

The European Central Bank (ECB) recorded at the end of exercise 2024 the greatest losses in the entity’s history, after accounting for ‘red numbers’ of 7,944 million euroswhich involves sixuping the losses of 1,266 million recorded in 2023 and accumulate two consecutive exercises in negative.

The entity has specified that in 2023 the full application of the provision of 6,620 million euros for financial risks reduced the losses of the year to 1,266 million euros, while in 2024 “this provision did not allow to cover losses, since its balance was zero ».

In this way, the losses of 2024, as are those of the previous year, are recognized in the ECB balance for compensation with future benefits and They do not allow the distribution of benefits to the National Central Banks (BCN) of the euro zone.

The last negative result of the Eurozone issuing institute before these last two consecutive exercises in ‘Red Numbers’ dated to 2004, when the entity scored losses of more than 1.6 billion euros. The ECB has not reaped benefits since 2021, When he won 192 million, after closing the accounts of 2022.

In this sense, the ECB has explained that these losses occur “after many years registering considerable benefits” and are the result of monetary policy measures adopted by the Eurosystem to fulfill its price stability mandate.

Specifically, he recalled that These monetary policy measures, popularly known as QE, demanded that the entity expand its balance through the acquisition of financial assets, mainly with fixed interest rates and long -term maturities, which resulted in the consequent increase in liabilities, for which the ECB pays interest at variable type.

Consequently, the increases in official interest rates between 2022 and 2023 to combat high inflation in the euro zone implied immediate increases in interest expenses in these liabilities, while interest income in the assets of the ECB, especially in the values ​​acquired within the framework of the Assets Purchase Program (APP) and the emergency purchasing program against the pandemic (PEPP, for its acronym in English), “they did not increase to the same extent.”

According to the ECB Results account, The entity counted in 2024 interest expenses of 73,881 million euros, 4.2% higher than those of exercise 2023, while interest revenues grew 5%, to 66,898 million, thus throwing a negative balance for the institution of 6,983 million euros, 3% below the one noted in 2023 .

In this way, the ECB has warned that “I could continue to incur losses in the coming years”although he anticipates that they should be inferior to those registered in 2023 and 2024, to re -get benefits later.

In any case, the ECB has underlined its ability to operate effectively and fulfill its primary mandate to maintain price stability “Regardless of losses.”