The macroeconomic environment has changed considerably – higher interest rates and heightened uncertainty are likely to stick around for some time to come. The economy and the financial system have been able to cope with the major shocks of recent years relatively well, due not least to comprehensive fiscal and monetary policy measures.
Credit risk and insolvencies in the corporate sector have so far been low. However, this harbours the danger that future risks will be underestimated. These vulnerabilities affect retail banking, too. In Germany and Europe, small and medium-sized enterprises in particular benefit from direct contact with local banks.