The current June Bundesbank Monthly Report contains an article on the debate about raising the inflation target. Those in favour of this argue that a higher target rate of price increase would provide central banks with more room for manoeuvre for monetary policy countermeasures in times of crisis. The Bundesbank’s economists contend that the negative implications of a higher inflation target are largely being ignored in this debate.

At the end of the second quarter of 2018, the financial assets of households in Germany stood at €5,997 billion. Compared with the first quarter of 2018, this represents an increase of €80 billion or 1.4%. Investors continued to favour liquid investments as well as forms of investment that are perceived to be low risk – with inflows of €43 billion, currency and deposits saw the largest gains, and claims on insurance corporations also recorded significant inflows amounting to €18 billion.

The financial assets of households in Germany stood at €5,875 billion at the end of the first quarter of 2018. Compared with the fourth quarter of 2017, this represents just a moderate increase of €14 billion, or 0.2%. In the first quarter, claims on insurance corporations grew in particular (€22 billion), followed by currency and deposits, which saw inflows totalling just under €15 billion.

Bundesbank President Jens Weidmann has rebuffed demands by the International Monetary Fund for Germany to use fiscal policy space for growth-stimulating measures. A more accommodative German fiscal policy would not relieve the perceived drag on the global economy, he said at a press conference following the IMF-World Bank Annual Meetings.