Bundesbank predicts German economy to enter mild recession in 1Q2023

Link Securities | According to the German central bank, the Bundesbank, in its monthly bulletin, and reported yesterday by Europa Press, the German economy will probably enter recession in 1Q2023 as the evolution of GDP will be weaker than in 4Q2022, when activity contracted by 0.2%. The Bundesbank also says it is confident that this contraction in economic activity will be milder than it expected in its December projections. According…


Jens Weidmann Steps Down From The Bundesbank

The first effects of the SPD victory are beginning to be felt: Bundesbank President Jens Weidmann will leave the institution at the end of the year “for personal reasons”. Weidmann represents Germany on the ECB council, where he is the longest-serving councillor. In a letter to German President Frank-Walter Steinmeier, Weidmann explained that he has come to the conclusion that “after more than 10 years – since May 2011 –…

ECB Bundesbank

Central Bank Independence: From The Theory To The Practice

Javier García Arenas and Adrià Morron Salmeron (CaixaBank ) | The independence of central banks seems indisputable, even more so in these times of pandemic, in which they have increased their use of unconventional policies and provided coverage for the high funding needs of states. In this article we will explore the theory and empirical evidence supporting the importance for central banks to maintain their independence.


Bundesbank: No Profit Distribution For The First Time Since 1979

The Bundesbank, Germany’s central bank, will not distribute any profit to the Federal Government for the first time since 1979, following the noticeable impact that the emergency monetary policy measures implemented in response to the pandemic had on the bank’s balance sheet, which substantially strengthened its risk provisions. The German central bank’s net interest income in 2020 fell by 38.2% to €2.87 Bn, while it posted losses of €1.557 Bn for financial operations and risk write-downs against the profits of €2.281 Bn in 2019.

ECB Bundesbank

The ECB Responds Without Hesitation To German Constitutional Court Ruling But Must Build Bridges

Intermoney | In the name of the ECB independence, Christine Lagarde, made it clear that the only guide for the institution is the fulfilment of its mandate and no resources or efforts will be spared in this task. Once the central bank has made it clear that it does not accept the authority of the German courts, it must move on towards a more political phase in which it can build bridges and provide a solution to the problem. If it does not do so within three months, the Bundesbank could find itself in a difficult legal mess.

zero rates

Both official and deposit rates are starting to thaw

Ewald Nowotny, a member of the ECB Governing Council said recently he was comfortable with the possibility of an increase in the deposit rate, from -0.4% to -0.2%, “as a first step” before any change in the official interest rate. At April 6, European banks kept 690, 384 million euros in the ECB. It’s the first time, since interest rates have been at a record low of 0%, that an ECB member has talked so clearly about a rise.

look an helicopter

The Last Thing Europe Needs Is Helicopter Money

Milton Friedman once wrote (1969) something like a short story about money creation. A helicopter drops banknotes amongst the population: a few lines in an article on how ‘to create’ inflation when the economic policy measures are thought to be exhausted.