Helicopter Money
In which Rat states the obvious
Another European central bank has admitted incurring steep losses from rising interest rates and having negative equity at the moment:
[Investing.com] Riksbank Seeks $7.3 Billion To Offset Quantitative Easing Losses
Rat has little sympathy.
Earlier this year, we heard similar news of German Bundesbank:
Bundesbank
German Central Bank May Need Bailout After ECB Bond Scheme Losses: Audit Office (ZeroHedge) This is not an «isolated incident». Last autumn, Dutch central bank admitted it might want to revalue its gold to get the balance sheet in shape. Neither is the issue limited to the euro zone where central banks aren’t quite «central» anymore – Bank of England and…
Although they rarely make headlines, most of Europe might have similar issues.
Opinions differ as to how serious this is. Some tend to dismiss it, saying that marking the bond portfolio to the market just results in redistribution of profit/loss in time if the securities are held until maturity. In case of Riksbank however, there is also persistent talk of it being engaged in foreign exchange intervention to prop up the krona. That doesn’t make its situation easier.
At this time, it’s also unclear to what extent this is the usual human recklessness «because they can» (because no central banker will lose their job because of loss), and if there is really a conspiracy to bring in a new cheese-backed digital currency, be it global or not.
In any case, what’s going on with European central banks is worth keeping an eye on.