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Slowdown in economic growth in Germany

In the Bundesbank's estimation, the economic upsurge distinctly lost momentum in the first two months of the spring quarter. As explained in the July Monthly Report, Bundesbank economists are expecting real GDP to remain at the previous quarter's level in the second quarter.


Foto zeigt Dr. Jens Weidmann

Weidmann calls for an end to preferential treatment of sovereign debt

Jens Weidmann, President of the Bundesbank, has spoken out in favour of ending the preferential regulatory treatment for government bonds. Speaking to members of the German-British Chamber of Industry and Commerce in London, Mr Weidmann said that an adequate risk-weighting of sovereign bonds in banks’ balance sheets would make banks more resilient. He also said that the large exposures regime that currently applies to loans should in future be applied to sovereign debt as well. Mr Weidmann remarked that sovereign insolvencies needed to be possible without jeopardising the financial system as a whole.


Dr Jens Weidmann

Towards a more stable European monetary union

Bundesbank President Jens Weidmann has called for a better balance between liability and control within the European monetary union’s architecture. "We need to regain that balance if we are to put EMU on a more solid footing", Mr Weidmann said at the Madrid Stock Exchange. The Bundesbank President furthermore argued that there should be an end to the preferential treatment afforded to sovereign debt in order to immunise the financial system against sovereign default.


Foto zeigt Dr. Andreas Dombret im Gespräch

Dombret: Push for more progress on supervision

Bundesbank Executive Board Member Andreas Dombret has called for further progress in the work on the Single Supervisory Mechanism. Speaking with the business magazine Wirtschaftswoche, Mr Dombret said that although regulation and supervision had made the financial system in Europe more secure, that was not enough. It must be possible in future for systemically important financial institutions to be wound up without bringing down the entire financial system, Mr Dombret said.


Dr Jens Weidmann

Monetary policy needs to focus clearly on price stability

Bundesbank President Jens Weidmann argues that the sole objective within the Eurosystem should remain the safeguarding of price stability. In an interview with the Sunday newspaper Welt am Sonntag he called this clear focus a major achievement. Mr Weidmann warned that adding further objectives such as financial stability would be like "playing with fire", and that it could lead to an arbitrary approach to monetary policy.


Dr Andreas Dombret holding a speech at the bundesbank symposium © Artur Worobiow

Dombret: "As simple as possible, as complex as necessary"

Representatives from the banking sector and regulatory authorities attended a Deutsche Bundesbank symposium to discuss the latest developments in the world of banking supervision. Bundesbank Executive Board Member Andreas Dombret presented the principles of sound regulation and good supervision to industry representatives and supervisors.


Dr Joachim Nagel

Nagel: renminbi investment quota important addition to clearing bank

The Bundesbank welcomes China's decision to allocate an investment quota of CNY 80 billion to Germany. This quota allows institutional investors from Germany to invest directly on the Chinese capital market. Bundesbank Executive Board member Joachim Nagel sees this as a further milestone on the road towards creating a renminbi trading centre in Frankfurt.


Claudia Buch, © Christoph Busse

"Staking out financial stability as a policy area"

Identifying risks to the stability of the financial system and using the appropriate instruments to mitigate them is the task of the Deutsche Bundesbank's Financial Stability Department, for which Deputy President Claudia Buch is now the responsible member of the Executive Board. In an interview in the German news weekly DIE ZEIT, she discusses exaggerations in the real estate and equity markets and what regulators can do about them. "We need to keep a very close eye on the interaction between risks across different markets", Ms Buch says.



Nothing new about negative real interest rates on deposits

Today’s low interest rates are making it difficult for investors to preserve the value of their assets. After all, if the interest received is lower than the rate of inflation, the value of an investment will diminish over time. However, this state of affairs – a negative real interest rate on deposits – is by no means a new phenomenon that is unique to the prevailing low-interest-rate environment. As it happens, negative real rates of interest have been the norm, rather than the exception, over recent decades.