Over 19 billion euros in losses - Bundesbank records worst result in history
Germany's central bank suffered a record loss of 19.2 billion euros last year, marking the latest setback for Europe's largest economy.
A bond-buying plan led the Bundesbank to report its largest net loss in history, with officials warning that the financial strain will continue throughout 2025.
The losses stem from many low-yielding government bonds that were unable to offset a rise in borrowing costs. This led the Bundesbank to pay more interest to banks.
In the UK, the Bank of England's quantitative easing program is indemnified, meaning the Treasury covers any losses and takes any profits.
In contrast, the German central bank takes on all the risk, meaning there will be no cost to German taxpayers. But it comes at a grim time for the German economy, which is grappling with a decline in output, an aging population and a global trade war launched by Donald Trump.
According to the head of the Bundesbank, "the German economy is in a state of stubborn stagnation. Real gross domestic product has practically not grown since 2018." According to official sources, a third consecutive year without growth is not ruled out."
The recovery will be a tough challenge for Friedrich Merz, the leader of the conservative Christian Democratic Union party, who is trying to build a coalition government after winning the election.
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