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Bundesbank President Jens Weidmann says that monetary policy is facing a period of normalisation. “But it’s a long path fraught with stiff challenges, and the final destination still hasn’t been pinpointed,” he told Germany’s Handelsblatt newspaper. Mr Weidmann stressed that uncertainty around the inflation outlook is receding and that it would be wrong to ignore the risks associated with what remains an ultra-loose monetary policy stance.

Bundesbank President Jens Weidmann has spoken out in favour of making the rules on debt more binding. "It would be helpful for the rules of the Stability Pact to be simplified," he said in a speech delivered in Freiburg. Furthermore, Mr Weidmann added, a more rigorous interpretation of the rules could be achieved by giving responsibility for fiscal surveillance to an independent authority instead of the European Commission.

The protracted period of low interest rates continued to take its toll on German banks’ profits last year, as the Bundesbank’s latest Monthly Report reveals in an analysis of the annual financial statements of German banks. Driven by a considerable decline in net interest income, aggregate operating income for all German banks fell by 3.8% to €123.1 billion.

Bundesbank President Jens Weidmann says that today’s banking system is more crisis-proof than it was a decade ago and that the principle of liability has been strengthened. “Above all, the capital requirements that banks are expected to meet have been increased,” Mr Weidmann noted in an interview with Germany’s Bild daily newspaper on the tenth anniversary of the bankruptcy of Lehman Brothers, a US bank.