Chiara Schlick
- Aug 15

Do Central Bank Losses Matter?

As interest rates reached record lows over the past decade, central banks around the globe were increasingly constrained by the zero lower bound, forcing them to deploy their balance sheet to achieve their policy mandates. However, the wide use of the balance sheet as a policy tool caused the balanced sheet risk to rise sharply. As inflation surged over the past year and central banks rapidly hiked interest rates, the risks of large central bank balance sheets have suddenly become visible as central banks started to experience significant losses. The Swiss National Bank (SNB) recorded an annual loss of 143 bn USD for 2022, the biggest loss in its 115-year history. Read the following article to find out what happens to central bank losses and whether they matter.