Current Events > Australia's central bank has equity wiped out by billions in bond losses

(+) Yeah! (+)

https://www.cnbc.com/2022/09/21/australias-central-bank-has-equity-wiped-out-by-billions-in-bond-losses.html

Bullock noted that while this would bankrupt a normal commercial entity, the RBAs liabilities are guaranteed by the government.

Australias central bank on Wednesday said its equity had been wiped out by losses suffered on pandemic-era bond buying, but its ability to create money meant it was not insolvent and would continue as normal.
Reserve Bank of Australia (RBA) Deputy Governor Michele Bullock said the bank had taken a mark-to-market valuation loss on its bond holdings of A$44.9 billion ($30.02 billion) in 2021/22.

The bonds were accumulated under a A$300 billion emergency stimulus program that ran from November 2020 to February 2022.
The losses eclipsed underlying earnings of A$8.2 billion and left the central bank with an accounting loss of A$36.7 billion. It also ate up all the RBAs reserve funds, leaving it with a negative net equity position of A$12.4 billion.
Bullock noted that while this would bankrupt a normal commercial entity, the RBAs liabilities are guaranteed by the government.
Furthermore, since it has the ability to create money, the Bank can continue to meet its obligations as they become due and so it is not insolvent, said Bullock.
The negative equity position will, therefore, not affect the ability of the Reserve Bank to do its job.

Ominous.

Patchwork posted...

Ominous.

im in us

WingsOfGood posted...

im in us

And I'm in Canada. But stuff like this can domino effect, you know?

Bad day, mate

It doesnt matter we can just print money lol, is a fucking amazing response btw.

EyeWontBeFooled posted...

And I'm in Canada. But stuff like this can domino effect, you know?

lol that not what I meant

"Ominus, im in us" is lyric for this song

https://www.youtube.com/watch?v=dNEHHf4BALs

WingsOfGood posted...

lol that not what I meant

"Ominus, im in us" is lyric for this song

https://www.youtube.com/watch?v=dNEHHf4BALs

*you unlocked a core memory*

Totally forgot about that song, lol

[LFAQs-redacted-quote]

Tell that to Trump

Makeveli_lives posted...

Tell that to Trump

Well, seeing as the U.S. dollar still has value outside of being used for toilet tissue or kindling unlike its Zimbabwean counterpart, Id say the evil Orange Man didnt do a very good job collapsing the world economy despite folks telling me he would.

How you gonna lose money on bonds?

[LFAQs-redacted-quote]


Unless you part of the government right?

>The RBA intends to hold the bonds until maturity and likely make a profit at that time, so offsetting the valuation losses.

Not that big of a deal as it's being made out to be. From the aforementioned fact that they can just print money to meet their other liabilities.

Naysaspace posted...

>The RBA intends to hold the bonds until maturity and likely make a profit at that time, so offsetting the valuation losses.

Not that big of a deal as it's being made out to be. From the aforementioned fact that they can just print money to meet their other liabilities.

Inflation is record high in Aus yes or no?