The German economy grew strongly in the past year. Driven by strong consumption growth, real gross domestic product (GDP), according to initial calculations by the Federal Statistical Office, was up by 1.7% from 2014.

According to the December edition of the Monthly Report, the Bundesbank believes that key preconditions for a European deposit insurance scheme are not yet met. For instance, it considers there to be a risk that a European deposit insurance scheme could be forced, indirectly, to shoulder other countries’ risks.

G20 finance ministers and central bank deputies met in Sanya, China, to discuss issues such as the 2016 agenda for the Chinese G20 Presidency, which began in early December. New initiatives in financial regulation were also a topic of discussion. Bundesbank Executive Board member Andreas Dombret attended as the Bundesbank’s deputy.

Bundesbank Executive Board member Joachim Nagel has spoken out in favour of disclosing the contents of the Agreement on Net Financial Assets (Anfa). The agreement sets balance-sheet ceilings for financial non-monetary policy operations on the part of Eurosystem national central banks. In a two-part interview with the German business daily Börsen Zeitung, Dr Nagel commented that monetary financing of the public sector was to be prevented at all costs.

The Bundesbank has published its inaugural environmental report, which outlines its environmental guideline and discloses its greenhouse gas emissions. "The Bundesbank aims to reduce its emissions by 25% by 2025," according to Bundesbank Executive Board member Johannes Beermann.

The Bundesbank sees the German economy as still being on a sound growth path. For 2017, it has, in fact, raised its earlier projection. According to Bundesbank President Weidmann, the cyclical tailwind is being sustained chiefly by the favourable labour market situation and substantial increases in households' real disposable income.

Bundesbank President Jens Weidmann has called on central banks to keep the objective of price stability firmly in their sights. Speaking at an event held in honour of former Bundesbank President Karl-Otto Pöhl, he also warned that diminishing the independence of central banks could reduce welfare for society as a whole.

The Bundesbank writes in its current Monthly Report that the German government budget surplus looks set to increase still further in the current year but be more or less entirely run down in 2016. Rising expenditure in connection with the influx of refugees is one of the rea-sons. This is where the benefits of maintaining a safety margin to the fiscal limits pay off, since they enable unexpected expenses to be quickly covered without leaving a hole in the budget.

Persistently low interest rates pose risks to financial stability, warn Bundesbank Deputy President Claudia Buch and Executive Board member Andreas Dombret at the press conference to unveil the Bundesbank's 2015 Financial Stability Review. This, they caution, applies particularly to banks and insurers.

The countercyclical capital buffer is designed to make banks more resilient and thus combat the threat of financial crises. A Bundesbank paper profiles this new instrument and explains how it makes banks provide for lean years during years of plenty.