Germany’s financial powerhouse just took a historic hit. The Deutsche Bundesbank posted a staggering €19.2 billion ($20.1 billion) loss for 2024—the worst in its history. Blame it on interest rates.
The European Central Bank (ECB) spent years loading up on low-yield bonds. Now, with rates soaring to 4%, those assets are bleeding value. Meanwhile, commercial banks are raking in bigger payouts, flipping the Bundesbank’s net interest income deep into the red—€17.9 billion in the hole last year alone. The reserves? Gone. Just €700 million left to cushion the blow.
And it’s not over. Bundesbank president Joachim Nagel warns that while the worst might be past, more pain is coming. The ECB isn’t faring much better, posting a second straight annual loss—€7.9 billion evaporated. No profit distributions. No safety net.
Germany is paying the price for reckless policies. A crumbling economy, disastrous energy decisions, and runaway spending have left the Bundesbank drowning. The consequences of years of easy money are now unavoidable.
Meanwhile, the Swiss are popping champagne.
The Swiss National Bank (SNB) just reported an eye-watering $88 billion profit—its biggest haul since 1907. Stocks and gold skyrocketed, and the SNB was perfectly positioned to benefit. For the first time since 2022, shareholders and the government are getting their cut.
Two central banks. Two completely different outcomes. One gambled on endless stimulus and got burned. The other played it smart and walked away with record-breaking profits.
Germany’s central bank is sinking—and there’s no lifeboat in sight.
Sources:
https://www.bundesbank.de/en/press/speeches/annual-accounts-for-2024-951884
https://finance.yahoo.com/news/german-bundesbank-central-bank-reports-121817315.html
https://www.bluewin.ch/en/news/first-loss-for-the-german-bundesbank-since-2578345.html