Customer deposits, regarded as a stable source of funding for banks, have gone up markedly. However, the high sovereign debt, part of which is on banks’ books, now poses a significant risk to financial stability – one that not even Germany’s financial system can avoid. This is made particularly clear by the latest Financial Stability Review published on 10 November by the Bundesbank.
The sovereign debt crisis, though, has not only hit the financial system, but is also increasingly impacting negatively on the real economy. Although the corporate sector has still been assessing the economic situation in Germany positively, it expects the situation to deteriorate in the future.