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The Bundesbank’s distributable profit fell to a 13 years low

The Bundesbank published its 2016 annual report on 23 Feb. It shows that its distributable profit for 2016 hit its lowest level since 2003, at €0.4 bn. This is striking as the size of its balance sheet hit a new high, at €1393 bn, because of the direct asset purchases (QE) and of the claims within the Eurosystem (TARGET 2). Note that the Bundesbank earned €1.4 bn from SMP holdings in 2016 and lost €0.1 bn because of PSPP holdings.

The Bundesbank earned €1 bn because of the negative rate applied on banks’ deposits. This helps to understand the reluctance of the Bundesbank to go further in terms of QE extension.

Graphe bundesbank
Bastien DRUT, Strategy and Economic Research at Amundi
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The Bundesbank’s distributable profit fell to a 13 years low
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