The Banque centrale du Luxembourg explained this decrease in its balance sheet as “mainly” a result of the European Central Bank’s (ECB) monetary policy decisions to tackle inflation over the past year. With the announcement of a , the ECB’s main refinancing operations rate now sits at 4.25%.
Here are a few key figures from the .
Total assets: €327.7bn
According to its balance sheet for the financial year ending 31 December 2022, Luxembourg’s central bank’s total assets amount to €327.7bn, an 11% drop from the previous year (€369.3bn).
Previous annual reports show that for the 2020 financial year, the BCL’s total assets amounted to €286.5bn, and for the financial year ending 31 December 2019, this figure stood at €207.3bn.
€8.088bn
The volume of loans (dominated in euro) to eurozone credit institutions related to monetary policy operations dropped 71%, from €28.038bn in 2021 to €8.088bn for the financial year ending 31 December 2022.
€301m
The BCL’s also noted that other “receivables from the Eurosystem”--intra-Eurosystem claims, or claims and liabilities between Eurosystem central banks--fell by 7.6%. This figure dropped from €326m in 2021 to €301m in 2022.
€12.248bn
The value of securities held in various securities purchase programmes linked to monetary policy amounted to €12.248bn at the end of the 2022. This amount includes €4.833bn of covered bonds, €10m corresponding to securities purchased under the former programme for securities markets, €5.809bn corresponding to securities purchased under the public sector securities purchase programme (launched in March 2015), and €1.596bn for the emergency purchase programme launched in March 2020 after the start of the covid-19 pandemic.
€212.899bn
On the liabilities side of the balance sheet, the volume of commitments in euros to credit institutions in the eurozone related to monetary policy operations fell by 17%, from €255.770bn at the end of 2021 to €212.899bn for the financial year ending 31 December 2022, said the BCL in its press release.
€4.763bn
At the end of 2022, the value of banknotes in circulation--corresponding to the grand duchy’s share of euro banknotes--amounted to €4.763bn. This is a slight increase compared to the year before: €4.679bn.
459 employees
The BCL had 459 employees at the end of 2022, compared to 435 at the end of 2021.
€1.019bn
Looking at the bank’s profit and loss account, the BCL’s net interest income for the 2022 financial year came to €1.019bn--this is up from €816m for the year ending 31 December 2021.
€3.93m
The BCL’s profits on financial operations have increased from €1.775m for the 2021 financial year to €3.93m for the 2022 financial year.
“A large part of this income is redistributed within the Eurosystem according to the rules of income distribution monetary,” said the BCL in its press release. “For the 2022 financial year, this redistribution resulted for the BCL in an outflow of funds in favour of the Eurosystem, amounting to €953.8m euros against €769.2m euros in 2021.”
BCL says income down due to rate increases
“As a result of the increases in key rates, the BCL’s income is down. The BCL, like all the central banks of the Eurosystem, is faced with an increasing cost of financing monetary policy portfolios, in particular from the fourth quarter of 2022: indeed, the assets that make up these portfolios are matched by yields lows set at the time of acquisition, while the interest charges on the deposits that credit institutions hold with the NCBs [national central banks] increase according to the evolution of the deposit facility rate,” said the BCL in its press release.
“Before reversal of provisions for general banking risks, the BCL recorded a negative result of €169.6m euros. To achieve a balanced result for the 2022 financial year, as decided by the board of the BCL, and in line with a policy of prudence implemented for ten years, a reversal of provisions for general banking risks for this same amount has been made, which weakens the BCL’s own funds accordingly.”
The financial statements of the BCL can be found and its 2022 annual report .