- Financial Stability Review 2022
The macro-financial environment has deteriorated substantially over the course of 2022. It has been shaped by subdued growth prospects, high inflation as well as rising interest rates and risk premia. Banks, insurers and investment funds have already recorded losses as a result of market corrections. The sharply higher and extremely volatile stock market prices for energy products have sharply increased the collateral requirements of central counterparties in derivatives trading. That said, government measures have been able to cushion liquidity shortages at enterprises in the energy sector. Overall, however, the supply of credit to the economy has worked well to date.
Major downside risks remain which require sufficient resilience. A worsening energy crisis, a sharp economic slump and abruptly rising market interest rates could put the German financial system under considerable pressure. Rising costs are limiting the financial leeway of households and enterprises. Future credit risks are increasing as a result. “To ensure that potential stress is not amplified via the financial system, financial institutions must be sufficiently resilient on their own,” said Claudia Buch, Vice-President of the Deutsche Bundesbank, at the presentation of the 2022 Financial Stability Review.