equity is the residual claim on assets after all liabilities are paid
Illya Gerasymchuk
equity is the residual claim on assets after all liabilities are paid
equity = assets - liabilities
so the ECB just covers the loss with their equity. this equity reduction is carried forward to be offset by future profits
ECB says that the loss will remain on the balance sheet and will be offset by future profits
the loss happened because ECB spent more than earned. they did so by using cash, selling assets or increasing liabilities
the net effect is the same: reduction in equity
