The Bundesbank will turn 65 on 1 August 2022. The legislation which brought it into being, the Bundesbank Act (Gesetz über die Deutsche Bundesbank), was signed into law on 26 July 1957 by the Federal President. When the Act entered into force on 1 August 1957, the Bundesbank took up its work as an independent monetary policy institution. “The Bundesbank’s greatest achievement is certainly that it has created a culture of monetary stability and embedded it in the public consciousness”, said Bundesbank President Joachim Nagel in an interview he gave to Deutsche Presse-Agentur (dpa) to mark the anniversary. He added that, "over many turbulent years, citizens have been able to rely on the stability of our currency," recalling the oil crises in the 1970s and the challenges of reunification.

"High inflation must not be permitted to become entrenched"

He noted that the currently very high inflation rates were weighing on many people and illustrated the importance of price stability, adding that the ball was now in the court of monetary policy. Although it could not change the main causes – the war and the pandemic – “we can and must now do everything we can to prevent the current high level of inflation from becoming entrenched”, according to Mr Nagel. He believes the still highly accommodative monetary policy stance has to be brought to an end quickly and sees the policy rate hike that has now been decided as a first important step. “Otherwise, we run the risk of having to increase interest rates all the more abruptly and sharply further down the line,” he continued. To him, this was also one of the lessons taught by the history of monetary policy. The Bundesbank, in concert with the ECB and the other national central banks, is doing all it can to bring the inflation rate back down to 2% target and to keep it there, even notwithstanding the challenges posed by climate change, the “energy U-turn,” demographic change and digital transformation. “People trust the Bundesbank, and they should continue to be able to do so.”