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European central banks may be unable to make a profit on Greek sovereign bonds that euro-area governments want to use in the country’s second bailout, European Central Bank council member Jens Weidmann was quoted as saying by Der Spiegel.
Weidmann said it’s “not certain at all” that the bonds will make a profit, the German magazine reported today, citing an interview. Risks on the central banks’ balance sheets have actually increased, Weidmann was quoted as saying.
Germany’s Bundesbank, which Weidmann heads, will increase its risk provisions, lowering its 2011 profit payout to the German government, he was quoted as saying.
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