The financial system has functioned well during the pandemic. Government stabilisation measures have shielded the real economy and – indirectly – the financial system from the pandemic fallout.

There was a steep rise economic output in Germany in the third quarter of 2021, the Bundesbank writes in its Monthly Report. Gross domestic product was up by 1.8%, therefore falling 1.1% short of its pre-crisis level in the fourth quarter of 2019. The Bundesbank’s experts expect that the economic recovery will probably take a breather in the fourth quarter. The Bundesbank takes a critical view of imposing a minimum wage of €12 per hour, which is an idea considered in the coalition talks. Inflation could temporarily rise to just under 6% in November.

The German financial system has functioned well during the pandemic; the extensive government measures have shielded the financial sector from losses. This is the conclusion reached by the Bundesbank in its Financial Stability Review 2021. At the presentation of the report, Bundesbank Vice-President Claudia Buch noted that, at the same time, vulnerabilities to adverse macroeconomic developments had built up continually, especially risks associated with real estate financing. “Now is the right time to take preventive action against future risks,” stressed Ms Buch.

Die Jahreswachstumsrate der weit gefassten Geldmenge M3 stieg im Oktober 2021 auf 7,7 % nach 7,5 % im September (korrigiert von ursprünglich 7,4 %).

Bundesbank President Jens Weidmann reiterated his call for monetary policy as a whole to be normalised if required to achieve the objective of price stability. “Ultimately, that also means reducing large bond holdings,” he said at the ceremony to mark the change of office at the Bundesbank’s Regional Office in North Rhine-Westphalia. Speaking at the hybrid event, Mr Weidmann bid farewell to Margarete Müller, who has headed the Regional Office for eight years. She is being succeeded by Jochen Metzger, who was most recently Director General Payments and Settlement Systems.