The rate hike hits the valuation of Treasury bonds. Banks count losses

The government induced banks to buy Treasury bonds through a banking tax. They filled their assets with them. Now, after the interest rate hike, the market value of government debt securities has dropped drastically. This will bring losses, reduce capital and affect safety indicators. For some banks, the issue is particularly sensitive.

  • Domestic banks have already taken over 34.5 percent. state debt. In the last six years, foreign institutions have replaced them as buyers of Treasury bonds
  • However, an increase in interest rates affects the valuation of those bonds with a fixed interest rate. On the Catalyst market, it fell by 9 percent.
  • The banks’ portfolio includes bonds with a fixed interest rate in the amount of as much as PLN 224 billion
  • The regulations mean that the valuation of the entire bond portfolio will not fall, but only a part of it
  • You can find more such stories on the Onet homepage

In 2015, the PiS government set itself the goal of immunizing the state debt from the influence of foreign investors – and it has, to some extent, succeeded. While at the end of 2015 only 41.9 percent. State Treasury debt belonged to residents, i.e. institutions registered in Poland, it at the end of September 2021, it was already 66.5 percent.

About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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