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Central banks have a glamour streak, too, Vivienne Walt reports for DealBook.
| UN peacekeeper | 07/25/25 |
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Date: July 25th, 2025 1:45 PM Author: UN peacekeeper Trump’s visit shifts the focus to the Fed’s finances. Cumulative losses at the self-funded central bank over the past two years hit $192 billion. (It usually makes a profit.) It’s blown through its initial budget to renovate two buildings it said were riddled with asbestos and lead. Tariffs and inflation helped drive up costs, Fed officials told reporters on a tour on Thursday. Could the renovations sink Powell? Senator Tim Scott, Republican of South Carolina, said the project seemed more fit for the Palace of Versailles “than a public institution.”
But for business and government leaders, the trend has been to project power to investors through high-priced buildings.
Central banks have a glamour streak, too, , Vivienne Walt reports for DealBook. “They print their own money, so they don’t have the same budget constraints,” Erik Fossing Nielsen, a senior adviser for Independent Economics, a London consultancy, said. “From Day 1, they needed to show wealth and trust, otherwise people would not give you their money to handle,” he added.
After the Berlin Wall fell, Germany, short on cash, spent tens of millions renovating its 1930s finance ministry complex, with corridors spanning the equivalent of 3.4 miles, and a contemporary art collection. And in January, the Dutch central bank reopened after a 320-million-euro ($376 million) renovation that includes bird nests and insect sanctuaries.
(Powell, by contrast, said he scrapped planned beehives at Fed H.Q. amid the furor.)
The Fed’s spending is minuscule compared with other projects. Apple’s headquarters opened in 2017 and cost $5 billion. And Saudi Arabia’s NEOM, the government-funded desert city project initially estimated to cost $500 billion, is now expected to reach trillions. |