According to the most recent issue of the Bundesbank’s Monthly Report, German credit institutions recorded a strong improvement in performance in 2021 compared with the year before. Profit for the financial year before tax was up €12.8 billion, hitting almost double the previous year’s figure at €27.1 billion – a development which the report primarily attributes to the fact that banks significantly scaled back their risk provisioning compared with 2020 and also released some of the risk provisions that they had formed that year. However, the current year could see the profitability of German banks dampened, in particular, by the repercussions of the Russian war of aggression on Ukraine. The report explains that this might increasingly impair economic growth, which would increase the likelihood of credit losses.

Visitors braved the wet autumn weather to flock to the Bundesbank’s offices in the Frankfurt city centre, where the Bank opened its doors to the general public this weekend. The two-day event, entitled “Backstage Bundesbank”, offered a variety of activities for visitors, including a discovery tour around the Bank’s Regional Office in Frankfurt, along with the chance to lift a gold bar, attend a variety of topical talks and meet Bundesbank President Joachim Nagel in person.

The Bundesbank’s experts see mounting signs of the German economy sliding into a recession. According to the current issue of the Bundesbank’s Monthly Report, economic output is likely to decline somewhat in the current quarter and to shrink significantly in the final quarter of 2022 and the first quarter of 2023. The economists put this largely down to the extremely tight energy supply situation.

To mark the twentieth anniversary of the introduction of euro banknotes and coins in 2002, Executive Board member Johannes Beermann has published a collection of writings for the Bundesbank entitled “The euro at 20: The future of our money”.

This year’s Carl Menger Prize for Economics has been awarded to economist Ricardo Reis. A lecturer and researcher at the London School of Economics and Political Science, Ricardo Reis ranks among Europe’s most respected macroeconomists. The Carl Menger Prize has been jointly awarded by the Deutsche Bundesbank, the Oesterreichische Nationalbank and the Swiss National Bank since 2014.

Economic output in Germany stagnated in the second quarter of 2022. Although the services providers which had been constrained during the pandemic received a boost, high price increases and uncertainty in connection with the war in Ukraine weighed on households and enterprises, according to the Bundesbank’s latest Monthly Report. In addition, the unfavourable developments on the gas market are clouding the future outlook and, according to the Bundesbank, are increasing the likelihood of a decline in gross domestic product in the fourth quarter of 2022 and the first quarter of 2023.

Refugees who fled the war in Ukraine can exchange hryvnia banknotes for euros in Germany. The Federal Ministry of Finance and the Deutsche Bundesbank agreed with the National Bank of Ukraine to extend the offer to 18 November 2022. The German Banking Industry Committee (Deutsche Kreditwirtschaft) and its participating banks want to continue supporting refugees. The scheme’s conditions remain unchanged.

The Bundesbank will turn 65 on 1 August 2022. “The Bundesbank’s greatest achievement is certainly that it has created a culture of monetary stability and embedded it in the public con-sciousness”, said Bundesbank President Joachim Nagel in an interview he gave to Deutsche Presse-Agentur (dpa) to mark the anniversary. He noted that the currently very high inflation rates were weighing on many people and illustrated the importance of price stability, adding that “we can and must now do everything we can to prevent the current high level of inflation from becoming entrenched”. “People trust the Bundesbank, and they should continue to be able to do so.”

The Bundesbank has joined 25 national central banks and supervisory authorities as well as the ECB in signing the ESCB and SSM Equality, Diversity and Inclusion Charter (Diversity Charter). “I am committed to advancing diversity and an open-minded working culture at the Bundesbank. By signing the ESCB & SSM Equality, Diversity & Inclusion Charter, the Bundesbank is doubling down on its promise to embrace the power of being different,” said Bundesbank President Joachim Nagel on the occasion of the publication of the Charter by the ECB at the end of July.

In its Monthly Report, the Bundesbank writes that the German economy is likely to have pretty much stagnated in the second quarter of 2022. Although the elimination of most coronavirus mitigation measures lent a strong boost to service providers, which had previously been constrained, the high inflation was a drag on households’ purchasing power and consumer sentiment deteriorated sharply. The report adds that supply bottlenecks and high uncertainty about future economic developments also weighed on industry.