Bundesbank President Jens Weidmann says financing conditions play a crucial role on the road to price stability, but there’s more to it than just glancing at the indicators. If those indicators flag changes, he states, the job of central banks is to analyse exactly how those changes came about. “I believe that financing terms should be able to evolve in line with the economic recovery in the euro area. It’s not a matter of using monetary policy to cement a particular interest rate level,” Mr Weidmann said in a speech delivered virtually in Frankfurt.

In the year that the coronavirus pandemic began, general government debt in Germany was up by €275 billion to €2.332 trillion. The debt ratio, meaning the ratio of debt to gross domestic product, rose from 59.7% to 70.0% in 2020, which is the sharpest increase in the debt ratio within the space of a year since German reunification.

“Weaving a thread from yesterday to tomorrow by preserving knowledge and sharing experience” was the title given to a symposium in which the Bundesbank joined forces with the Institute for Banking and Financial History to celebrate the Bundesbank’s Historical Archives’ 50th year. Bundesbank Executive Board member Burkhard Balz paid tribute to the achievements of the archive’s staff.

The Network for Greening the Financial System (NGFS) has released its latest report, entitled “Adapting central bank operations to a hotter world”, which outlines specific options available to central banks to factor climate-related risks into their monetary policy operations. Bundesbank Executive Board member Sabine Mauderer called the report a milestone.

According to the current issue of the Monthly Report, there is likely to be a steep fall in German economic output in the first quarter of 2021. In particular, activity in services sectors with high frequencies of interpersonal contact will probably have declined again sharply. By contrast, industry is profiting from stronger foreign demand and is likely to have bolstered economic activity in the current quarter.

2020 saw Germany’s current account surplus drop by €26½ billion to €232 billion. Expressed as a share of nominal gross domestic product, the balance declined by half a percentage point to 7%, which is significantly below the record level of 8½% in 2015.

The Harmonised Index of Consumer Prices is the key indicator used to measure price stability, and thus orient monetary policy, in the euro area. Bundesbank researchers have now investigated whether and to what extent there has been measurement bias when calculating this index for Germany in the past.

The Board of Directors of the Bank for International Settlements (BIS) has re-elected Bundesbank President Jens Weidmann as Chairman for another three-year term, beginning on 1 November 2021.

The Bundesbank’s open-air exhibition on German monetary Union will be on show from 6 to 28 March 2021 in Hamburg.

The Bundesbank is not distributing a profit to the Federal Government for 2020 – for the first time since 1979. The main reason was the greater level of risk provisioning, Bundesbank President Jens Weidmann explained at the press conference to present the annual accounts in Frankfurt am Main. In the previous year, the Bundesbank distributed a profit of €5.9 billion. On the whole, the emergency monetary policy measures taken in response to the coronavirus pandemic are having a noticeable impact on the Bundesbank’s balance sheet.