Weidmann meets school students
Why exactly do countries still have their own central banks? Will we be paying for things in the future using bitcoins instead of the euro? And how does the Bundesbank’s president manage to reconcile professional and family responsibilities? The questions that Bundesbank President Jens Weidmann fielded from the roughly 140 students kept him on his toes. Aged between 17 and 25, the students travelled from all over Germany to Frankfurt am Main to put their questions to the Bundesbank’s president. A total of 13 groups of school students who had specially applied to attend took part in this year's “Weidmann meets school students” event.
Knowledge and trust go hand in hand
Weidmann was pleased by the huge turnout to the event, noting at the beginning of the Q&A session that, in this day and age, interest in monetary policy couldn’t be taken for granted. He emphasised that knowledge and trust went hand in hand, telling his audience: “
You, too, have a role to play in keeping our money stable.”
As chance would have it, stable money was one of the first questions the Bundesbank President had to field. One student wanted to know why the European Central Bank defines price stability at roughly two per cent instead of zero per cent. Weidmann explained that some changes in prices were impossible to capture using the official inflation rate. As a case in point, he noted, laptops are just as expensive as they were some years ago, but the technology had improved considerably, making them de facto cheaper. The Bundesbank President continued by saying that different euro area countries had different inflation rates. “
A euro area-wide inflation rate of zero per cent would mean that some countries have a negative rate of inflation.”
Future of cryptocurrencies
Many were also interested in the Bundesbank’s take on the future of so-called cryptocurrencies such as bitcoin. Weidmann’s reply was that, in this context, the term currency was misplaced. “
Bitcoin and other crypto-tokens do not possess the key properties of money,” Weidmann said. Because their value fluctuates sharply, they could not serve as a store of value and, for that reason, they were not suitable as a unit of account, either. For Weidmann, crypto-tokens are mainly a speculative asset and thus not an alternative to cash.
How can counterfeit money be spotted?
The students also had the opportunity to compare a real €50 note with a bogus version. Weidmann showed them how to tell genuine and fake notes apart and what security features they had to be particularly on the lookout for. The Bundesbank President warned that using counterfeit currency is against the law. At the same time, he stressed that the likelihood of coming into contact with forged banknotes in Germany was very remote.