The economic fallout from the crisis remains at the forefront for the time being. In this context, the Bundesbank estimates that the number of corporate insolvencies will rise considerably, albeit from a very low starting level. The number of insolvencies will probably stay well below the record high levels of 2003 and 2004.
And the resulting loss allowances are likely to be manageable overall for the banking sector. 3 Public finances The fact that the economic slump last spring has not had any more serious repercussions so far, or even precipitated a downward spiral, is due mainly to the decisive intervention by ﬁscal policy.