This slims down central bank profit distributions to government coffers. Depending on its scale, an interest rate reversal might then even lead to negative annual results. Rising short-term interest rates might end up impacting public finances sooner than was previously the case.
In view of this, too, the high levels of government debt could expose the central banks to political pressure to keep interests rates low even if the inflation outlook actually warranted a normalisation. 17. Shin, H. S. (Seite), Central banks and the new world of payments, speech delivered on 30 June 2020. 18.