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.

What happens when the financial system isn’t so stable? And what does the Bundesbank do to safeguard financial stability? Find out in our video on the financial system.

Bundesbankvorstandsmitglied Johannes Beermann hat bei der Immobilienmesse Expo Real mit Expertinnen und Experten über das Thema „Building Information Modelling (BIM) im öffentlichen Bau – Herausforderung und Zukunftschance“ diskutiert. 

Financial repression is intended to help the government deleverage over time, for example following crises, by artificially lowering the yield on government bonds. However, its impact on the deb-to-GDP ratio also depends on how it affects the economy as a whole, as financial repression also influences private investment and saving decisions. In view of these macroeconomic interrelationships, financial repression can lead to a net rise in the government debt-to-GDP ratio. A new study suggests that this is what happened in the United States following the Second World War.