For more than a decade after the global financial crisis, central bankers poured trillions of dollars into the financial system on concessional terms. Today, their generosity haunts them and the taxpayers. By raising interest rates to fight runaway inflation, the Fed and the ECB must pay banks huge interest on deposits created by central banks themselves through massive bond buying and cheap loans. This prospect is rather daunting at a time when millions of people are struggling to cope with the high cost of living. Worse still, this means that they will have little or no money to contribute to the public treasury, and some banks in Europe may even need their help.

“The central bank keeps sending money to the banks, and we have to cut our spending,” said Lex Hoogdwin, an economics professor at the University of Groningen and a former board member of the Dutch Central Bank. “So it’s basically a political issue.” Indeed, there are increasing calls to limit interest payments to banks, much to the chagrin of an industry that feels it has been hurt by a decade of low interest rates. Among those who want financial groups to take the hit is Mikael Hoogeven, a Dutch MP who sits on the European Parliament’s economic committee that oversees the ECB. “If the taxpayer ends up paying the bill, it will be very unfair,” he told Reuters. Former Bank of England Deputy Governor Paul Tucker urged him to cut interest rates on some of these reserves and save between £30bn and £45bn in each of the next two financial years.

The US Treasury does not need to worry about the Fed’s bailout, which could simply delay any damage. However, it will run a deficit of about $50-100 billion, which it receives from the Federal Reserve every year since and after the financial crisis. And perhaps this means that Fed Chairman Jerome Powell will be criticized by members of Congress for the fact that funds will go not to the government, but to banks, many of which are foreign. Finally, for no one is this problem more acute than for the ECB, which has turned against itself by lending money to banks at negative interest rates. They will now earn guaranteed returns simply by depositing their cash with their national central bank at an annual interest rate of 0.75%, which could rise to 3% in 2023.