The Bank of France records a loss of €17.7 billion in 2024

This loss, far from being anecdotal, highlights deep vulnerabilities within the European financial system, exacerbated by inflation, rising interest rates, and the management of public debts.

The Bank of France found itself in 2024 facing an unprecedented financial situation with an operating loss of 17.7 billion euros. This loss, far from being anecdotal, is a symptom of deeper vulnerabilities within the European financial system, exacerbated by inflation, rising interest rates, and the management of public debts.

The stellar performance of the Paris Stock Exchange in recent years, embodied by the rise of the CAC 40 to record highs, contrasts sharply with the operating loss of 17.7 billion euros declared by the Bank of France for 2024. This divergence highlights the complex financial realities faced by France at the start of 2025.

While the State will be able to count on the net income of the central bank to reduce its own deficit, the operating loss of 17.7 billion euros reported by the Bank of France is a record figure that is sure to spark reactions. This loss is explained by several factors.

First, the bank’s role in managing government bonds led to significant losses due to the rise in interest rates. These losses are a direct consequence of the European Central Bank's (ECB) actions to combat inflation.

Second, the bank's net income was also impacted by the decrease in interest paid by the State on advances used to finance the public deficit. This decrease is linked to the reduction in the public deficit observed since 2023.

Finally, the stellar performance of the Paris Stock Exchange, which saw the CAC 40 reach record highs in recent years, did not generate significant capital gains for the central bank, despite holding a diversified portfolio of shares. This lack of capital gains is explained by the fact that the bank's stock portfolio is not actively traded and is managed for the long term.

These elements explain the nature and extent of the loss suffered by the Bank of France. Moreover, they shed further light on the vulnerabilities of the European monetary system in the face of a changing economic context.

In addition to these direct losses, the situation raises major concerns regarding French public finances.

The net loss of €7.7 billion in 2024 prevents the Banque de France from paying dividends to the State, thereby reducing the resources the State has available for its expenses.

This loss, although mitigated by accumulated reserves, shows a critical trend that began in 2023 with a deficit of €12.4 billion.

The fact that these losses are worsening year on year prompts reflection on the sustainability of this model as well as on the capacity of the Banque de France to maintain such management in such a volatile economic context.

However, financial authorities expect a reduction in losses in 2025, suggesting that the situation could stabilize if economic conditions improve. But this will largely depend on the evolution of interest rates and inflation, as well as the response of the ECB to prevent a collapse of national central banks.

In the long term, such a recurring loss could force the State to reassess its economic priorities, or even lead to adjustments in its budgetary policy.

This loss reveals the fragilities of the European economic system and raises questions about the sustainability of current monetary policy. The uncertainty that persists regarding the evolution of interest rates and the impact of these choices on public finances necessitates serious reflection on the future of the welfare state and the management of public finances in France.