How much does regulation really affect lending in the German banking sector? A Bundesbank survey of predominantly significant institutions shows that a lack of capital is not currently the key bottleneck. Instead, margin pressure, efficiency, risk appetite and customer proximity are the important factors determining the institutions’ competitiveness.

More growth through less regulation? The financial supervisors at the Bundesbank take a different view. Solid capital requirements make banks resilient, safeguard lending during crises and protect governments, enterprises and households from follow-up costs. Using current data, our experts show why resilience is not a drag on growth, but rather a prerequisite for stable economic activity.