The Bank published a balanced net result for 2023 on Friday, but announced that it had used 12.4 billion euros of its reserves to fill an operational hole of the same order dug by its own rate hike policy. started in the summer of 2022. We have to go back to 2003 to find the previous operational loss of the Banque de France.
The operational loss for a central bank is not intuitive: it can be explained in two ways.
The increase in rates, decided by the European Central Bank (ECB) to counter inflation which had accelerated significantly after the outbreak of the war in Ukraine at the end of February 2022, forces the Banque de France to pay more for commercial bank deposits.
The latter receive, for example, a remuneration of 4% on the unused cash that they deposit at the central bank counter.
At the same time, the Banque de France receives much lower interest for securities acquired with all its might when rates were very low.
The end of this support policy, very active during the Covid-19 pandemic, prevents central banks from replacing these securities with other more recent and more profitable ones.
Result: a bill of more than 12.4 billion euros last year for the Banque de France, compared to an income of nearly 5.5 billion in 2022. The net result ultimately is identical in 2022 (the bank having then filled its reserves) and 2023: zero.
The objective of price stability
The ECB's monetary policy, applied by all the central banks of the euro zone, "
is not carried out to maximize our results or minimize this or that difficulty
", underlined Friday the governor of the Bank of France, François Villeroy de Galhau.
“
It is carried out in relation to one compass and one only: it is the objective of price stability
,” he recalled.
The Banque de France also wanted to be reassuring about its solidity, with François Villeroy de Galhau mentioning a “
significant and sufficient
” amount of reserves.
United States, Germany, Switzerland... major central banks have announced losses for the year 2023 in recent weeks.
The American Federal Reserve (Fed), for example, announced on January 12 an operational loss of $114.3 billion for 2023, the largest in its 110-year history.
The remuneration of bank deposits at a still high rate could cause central banks to suffer even more in 2024, before a gradual return to balance as they lower their rates.