Bank of Canada reports another whopping net loss for fiscal year 2023 | General financial discussion | Discussion forum

The latest annual report of the Bank of Canada, for the fiscal year ended December 31, 2023, is now out, and the Bank of Canada has posted another whopping, an even bigger net loss, of nearly $6 billion. To be fair, this was well telegraphed and forecast by the BoC in 2021 and 2022 that it expected "sizable net losses" for the foreseeable future. The reason? Simple math. It has a lot of federal, provincial, corporate, and consumer mortgage debt it purchased through various pandemic era programs, which dramatically compounded (i.e., expanded) its balance sheet. Much of that debt is priced at 0%, near 0%, or ultra low rates, and, at the same time, its Policy Interest Rate of 5% paid to be governments, central banks, and federally-regulated financial institutions who have deposits at the bank.

Ultimately, though, this does have an effect on the federal government's Public Accounts because the BoC's results compound the existing federal government deficit.

On the bright side, the BoC's assets (i.e., debt it holds) decreased by $86 billion in 2023, down to $292 billion from $378 billion in 2022.

Cheers,
Doug