And so it is part of the job description of every Bundesbank President to sometimes offer critical advice as well. It’s essential that monetary policymakers do not come under pressure to guarantee government solvency. In the debate surrounding the reform of the European fiscal rules, one thing is therefore particularly vital: high debt ratios must be scaled back reliably.
4.2 Banks and financial stability The coronavirus pandemic has shown just how important it is that general government has the financial capacity to act – a swift, extensive and responsible fiscal policy response meant that larger-scale economic damage could be avoided. This also protected Germany’s financial sector from losses. However, we shouldn’t simply assume that this will continue to be the case.