Did German banks take on a particularly high level of risk during the financial crisis by investing in risky government bonds? A new study examines the behaviour of German banks between 2008 and 2014 and reveals that German banks – especially those that received government support and were comparatively undercapitalised – de-risked. This finding contrasts with the results of similar studies for banks in the euro area periphery countries.

Article from the Monthly Report November 2020

The November 2020 edition of the Monthly Report comments on the economic situation in Germany in autumn 2020.

This research brief reports how consumption plans and spending propensities were affected at the early stages of the COVID-19 pandemic. An online survey shows that private households have been significantly more cautious in their spending intentions, while the average marginal propensity to spend has remained at an elevated level.

Announcements of policy actions may influence households’ expectations about future individual and aggregate economic outcomes. We show that households have lowered their expectations with regard to the economic situation and that uncertainty about the economy increased during the initial stage of the COVID-19 pandemic. We also show that households who received information on stabilizing monetary and fiscal policy measures, surprisingly, become more pessimistic concerning their future income and GDP growth.