The central bank’s president Joachim Nagel High recently said energy prices, the green transformation and demographic change are putting the export-oriented industry, in particular, under great pressure.
Many German enterprises are also bemoaning the large fiscal burden and increasing bureaucratic hurdles.
Total assets of the bank contracted last year by around €149 billion, or 5.9 per cent, to €2,373 billion, and its earnings situation improved slightly year on year.
The overall price outlook is encouraging and price stability is within reach, Nagel said in a release from the bank.
The Bundesbank’s sizeable holdings of securities for monetary policy purposes pose an interest rate risk: Much like in 2023, the combination of long-term monetary policy securities—generating low levels of remuneration—on the assets side and credit institutions’ short-term deposits remunerated at higher rates on the liabilities side was a source of considerable strain, Nagel said.
She expects these financial burdens to ease in 2025.
ALCHEMPro News Desk (DS)
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