Vice-President Claudia M. Buch points out that an unexpected economic downturn could be amplified if the banking sector deleverages to maintain capital ratios. Hence, “banks must maintain capital buffers designed to absorb losses and thereby stabilizing lending”, Buch stated at an event in Dublin. 

At the end of December 2021, Germany’s net external assets stood at €2,545 billion, thus amounting to around 71% of nominal gross domestic product (GDP). Both German claims and liabilities vis-à-vis non-residents continued to rise in 2021.

The German economy is still experiencing a period of weakness. According to the Federal Statistical Office’s flash estimate, in the second quarter of 2023, seasonally adjusted real gross domestic product (GDP) stagnated at the level recorded in the previous quarter. The current issue of the Bundesbank’s Monthly Report reports that weak foreign demand and higher financing costs are weighing on the economy. The large backlog of orders in industry and construction and abating supply bottlenecks prevented an even weaker development. The sound labour market acted as a tailwind for the economy. 

Cash is a quick and cheap means of payment in the German retail trade sector. On average, cash payments take just over 22 seconds and cost around 24 cent per transaction, according to a study on the costs of cash payments in the retail trade sector which the Deutsche Bundesbank carried out in cooperation with EHI Retail Institute.

Bundesbank President Jens Weidmann has conflicting views on the United States’ decision to initially exempt the European Union from the recently enacted tariffs on steel and aluminium. Though it avoided an open trade conflict, the agreement reached between the United States and the EU was no victory for international free trade, Mr Weidmann explained during a speech in Vienna.