Central Banks
Europe’s Central Banks Won’t Need Cash Injection, IMF Paper Says
- Two years of euro-area losses calculated to total €55 billion
- ECB should ‘look through negative capital’ at its members
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Euro-area central banks face short-run losses but that shouldn’t necessitate capital injections from governments, according to research from the International Monetary Fund.
The rapid monetary policy turnaround in the region since interest-rate increases began in 2022 will inflict combined losses of €55 billion ($60.2 billion) this year and next, Nazim Belhocine, Ashok Vir Bhatia and Jan Frie wrote in the paper published Friday.