In the current issue of its Financial Stability Review, the Bundesbank has identified three vulnerabilities for Germany, which have continued to build up. [9] First, credit risk may be underestimated. In Germany, we have been observing a shift in banks’ lending portfolios towards relatively riskier enterprises. Second, the financial system is vulnerable to abrupt changes in interest rates.
In particular, the effects of oil prices on the U.S. economy have been quite extensively studied. For example, Kilian (2008) and Kilian and Vigfusson (2017) present evidence on how increases in oil prices have historically adversely affected U.S. economic performance, as the United States is a net importer of oil. More recently, as outlined in Board of Governors (2018, pp.