Interview: Nagel and Villeroy de Galhau at Phoenix
In a joint interview, Bundesbank President Joachim Nagel and François Villeroy de Galhau, Governor of the Banque de France, discussed “Germany, France and inflation – ways out of the crisis”. Their discussion centred on the question of when the current monetary policy stance will bear fruit and the medium-term inflation target of 2% will be achieved again. “I am firmly convinced that we will see significantly lower inflation rates from 2024 onwards. We will reach 2% with the monetary policy measures we have initiated this year,” Mr Nagel said.
Financial Stability Review 2022: German financial system could come under considerable pressure
The worsening energy crisis, a sharp economic slump and abruptly rising market interest rates could put the financial system in Germany under considerable pressure. “To ensure that potential stress is not amplified via the financial system, financial institutions must be sufficiently resilient on their own,” said Claudia Buch, Vice-President of the Deutsche Bundesbank, at the presentation of the 2022 Financial Stability Review. “Financial institutions should assess the impact of adverse scenarios. Given the high uncertainty, they should engage in prudent risk provisioning and exercise caution when distributing profits,” emphasised Bundesbank Executive Board member Joachim Wuermeling.
Johannes Beermann: Extensive crisis preparedness ensures cash supply
Bundesbank branches can pay out cash at any time, even in contingency and crisis situations – according to Executive Board member Johannes Beermann, comprehensive risk preparedness measures have put the Bundesbank in a good position to deal with such cases, too. At a meeting with the press in Frankfurt, he noted that successful crisis preparedness was predicated on interplay between all cash handlers, however.
Joachim Nagel repeats call for further interest rate steps
Speaking at this year’s European Banking Congress, Bundesbank President Joachim Nagel repeated his call for a further increase in key interest rates. “To ensure the return to price stability, long-term nominal and real interest rates must sufficiently increase,” he said. Fellow Congress speakers Christine Lagarde, European Central Bank President, and Klaas Knot, ECB Governing Council member, also argued in favour of raising interest rates.