During the extended spell of low interest rates, risk has been growing in the German financial system in three respects. 2  1. Low interest rates and strong growth might cause risks to be underestimated. 2. Second, risks can be mutually reinforcing in the financial system. 3. And third, the resilience of the financial system might be overstated.
Low interest rates and strong growth might cause risks to be underestimated. Germany’s economy is in good shape at the moment, and it's not alone – the global economy, too, is expanding at a brisk pace.