Friday 21 / February / 2025
Frankfurt: The European Central Bank (ECB) on Thursday reported its second consecutive year of losses, with a deficit of about €7.9 billion ($8.2 billion) recorded for 2024.
This marks the highest loss in the ECB's more than 25-year history.
The eurozone's central bank does not rule out further years of losses: "Should this be the case, any such losses are expected to be lower than those incurred in 2023 and 2024. Thereafter, the ECB is expected to return to making profits."
In 2023, the ECB was able to reduce its loss to around €1.3 billion, thanks to the release of billions in provisions.
The bank emphasized that the temporary losses are the result of necessary monetary policy decisions. Nevertheless, the ECB said it can operate effectively and fulfil its main task of ensuring price stability in the 20-country eurozone.
Starting in the summer of 2022, the Frankfurt-based ECB rapidly raised interest rates to bring high inflation under control. Inflation is now well off its record highs, prompting the ECB to cut eurozone interest rates again.
Higher interest rates in the financial markets also led to higher interest expenses for central banks, which were not matched by interest income. The ECB's interest expenses amounted to €6.98 billion compared to the previous year's €7.19 billion.
It also reported write-downs of €269 million, higher than the €38 million in 2023, mainly due to the decline in the market value of US dollar securities and the depreciation of the Japanese yen.
The red figures also have consequences for the national central banks, as the usual distribution of profits by the ECB has again been suspended.
