The consolidation process in the German banking sector continued in 2020 but at a slower pace than in the previous year. This was due, first, to a lower number of mergers in the savings bank and cooperative sectors and, second, to an elevated level of closures of British securities trading banks in 2019 on account of Brexit.

The June 2021 edition of the Bundesbank’s Monthly Report outlines the outlook for the German economy for 2021 to 2023 and analyses how the central bank’s asset purchases increase the sensitivity of government finances to interest rate changes. It also features an article on central government debt and why interest payment premiums should be booked on an accrual basis, while, on the topic of local government debt, a further article discusses how local government budget imbalances can be avoided and cash advances limited.