The Monthly Report October 2014 describes the methodological changes in the financial accounts, comments on the embedment of the German economy in the international division of labour and presents the Single Supervisory Mechanism of the European banking union.

Implementing a minimum exchange rate regime by buying foreign currency eases monetary conditions domestically and may thus have a direct impact on the inflation rate. However, such foreign currency purchases involve a risky expansion of the central bank’s balance sheet total. A new model can now predict what expansion of the balance sheet a central bank must expect if it wishes to implement a minimum exchange rate in the foreign exchange market.