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Bundesbank’s Risky Bets Backfire: Whopping Losses Wipe Out Safety Net

Central banks, including the German Bundesbank and the European Central Bank (ECB), incurred significant losses in 2023 due to higher interest rates affecting their securities holdings. The Bundesbank reported no distributable profit, while the ECB lost 1.3 billion euros. Despite these financial challenges, central banks maintain their ability to implement monetary policies and ensure price stability.