The sharp decline in gross domestic product in spring is likely to be followed by a strong countermovement in the third quarter of 2020, the Bundesbank writes in its latest Monthly Report. Even so, the third quarter will still be significantly down on the pre-crisis level.
Mauderer: Enterprises should further diversify their funding
Bundesbank Executive Board member Sabine Mauderer has called on enterprises to diversify their funding. In an op-ed piece in the German Handelsblatt newspaper, she writes that, although bank loans remain important, a variety of funding sources are needed to withstand crises and to remain innovative.
German banks’ profitability in 2019 adversely impacted by one-off effect
German banks’ profitability deteriorated further in 2019. However, this is due primarily to strategic restructuring at one big bank, the Bundesbank’s economists note in the latest issue of the Monthly Report, with the resulting negative one-off effect overshadowing the growth in profit for the financial year observed for all other categories of banks.
Weidmann identifies risks and rewards in central bank digital currency
Bundesbank President Jens Weidmann feels that the introduction of central bank digital currency (CBDC) needs careful consideration. The various risks suggest that a prudent design and cautious approach would be essential, he said at the Bundesbank’s virtual autumn conference. CBDC is not necessarily needed to provide the general public with quick, secure and cheap payment methods.