Times of strong growth and low interest rates have seen vulnerabilities build up in the German financial system. In addition, the probability of an economic downturn has increased. “Now is the time to build up sufficient capital and strengthen the financial system’s defences,” said Bundesbank Vice-President Claudia Buch at the press conference on the publication of the new Financial Stability Review.

Germany’s current account recorded a surplus of €16.9 billion in January 2021, down €8.9 billion from the previous month’s level. This was primarily due to the decline in the surplus for invisible current transactions – which comprise not only services but also primary and secondary income – but also to the narrower surplus in the goods account.