Disruptions to the financial and monetary system can stunt economic growth, reduce employment and strain government budgets. The Bundesbank observes the financial and monetary system, analyses systemic risks and plays an active role in national, European and global committees and institutions in order to identify threats in a timely manner and avert financial crises through risk-based measures and regulation.

Risks to the stability of Germany’s financial system have continued to build over the course of 2019. “An unexpected economic downturn and abrupt rise in risk premia could hit Germany’s financial system hard,” explained Bundesbank Vice-President Claudia Buch at the press conference on the Financial Stability Review.

BaFin has issued a general administrative act regarding the domestic countercyclical capital buffer rate. The rate is to be raised from 0 percent to 0.25 percent as of 1 July 2019. This increase is a preventive measure intended to enhance the resilience of the banking system.

In its meeting on 27 May 2019, the German Financial Stability Committee (G-FSC) decided to submit a recommendation to the German Federal Financial Supervisory Authority (BaFin).

The financial crisis sparked reforms in the international financial markets. The Financial Stability Board now reviews the impact of those reforms. The Bundesbank and the Leopoldina took this as an opportunity to invite experts from academia and administration to exchange their views on policy evaluation. The results have now been published.

The G7 finance ministers and central bank governors have adopted fundamental elements for third party risk management and for penetration testing to further promote cybersecurity in the financial sector.

The Bundesbank brings its expertise to numerous European and international bodies and organisations in which issues concerning financial stability and the financial and monetary system are analysed and policy measures are coordinated.