From the point of view of Bundesbank President Jens Weidmann, the ECB’s new inflation target of 2 percent is neither a move towards significantly higher inflation rates nor a dramatic change of course. He does not see central banks as having the type of influence over the economic process that would enable them to steer inflation rates with pinpoint accuracy to the nearest decimal place. “That’s why a slight, temporary overshooting of the 2 percent target is just as unavoidable as a slight, temporary undershooting”, he said in an interview with the German daily newspaper Frankfurter Allgemeine Zeitung. “This isn’t a problem, and is something we agreed on as part of the strategy”, noted Mr Weidmann.

In the first half of 2021, the Bundesbank recorded approximately 21,400 counterfeit euro banknotes with a nominal value of €1 million. This represents a decline of 13% compared with the second half of 2020. This is due to the coronavirus restrictions, said Bundesbank Executive Board member Johannes Beermann.

The digital transformation is increasingly putting German banks to the test. As this unfolds, it is important to not lose sight of security, particularly with banks becoming a growing target for professional hackers, the Bundesbank’s economists write in the latest issue of the Monthly Report. They warn that technology alone is not enough to stay ahead of digital risks.

German economic activity likely grew strongly in the second quarter, largely offsetting the severe setback it suffered in the first quarter, the Bundesbank writes in its current Monthly Report. The services sector in particular contributed to the considerable recovery. Inflation is likely to rise as the year progresses.