The turnaround in interest rates is weighing heavily on many central banks worldwide, including the Austrian OeNB. Simply put, the reason is a mismatch between income and expenses.
A lot of money has been invested in bonds (and shares) in recent years. However, the interest income from this was very low due to the market conditions. At the same time, banks like to store their surplus money safely with the central bank. They recently had to pay significantly higher interest rates for this.
Investment minus offset with reserves
The bottom line is that OeNB governor Robert Holzmann was able to compensate an investment shortfall of 1.9 billion euros in 2022 with provisions from previous years in order to achieve a balanced result.
No money for the state
So there is no dividend for the state. And this too will fail in the medium term. The federal government received a total of about two to three billion euros over the past ten years – on top of the 35 billion euros in benefits from the zero interest rate policy.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
