Jens Weidmann, President of the Deutsche Bundesbank
The spread of the corona virus leads to dramatic losses on the stock exchange. Jens Weidmann says how stable the banks are, whether a recession is coming – and what monetary policy can do.
Mr. Weidmann, there is great nervousness on the financial markets. Are we facing a crisis like in 2007 to 2009?
We are not in a comparable situation today. The crisis does not come from the financial system. The main thing is to contain the corona virus. Overall, the financial system is now much more stable.
Financial markets have been disappointed with today’s decisions by the European Central Bank. Should you have done more?
No, we reacted appropriately to our role and opportunities. Expectations for the European Central Bank were possibly too high, as were expectations for the Fed and the Bank of England. The central banks are currently not on the first line of defense.
What is your role?
We have done what a central bank has to do in the first place in a crisis: we have provided the banks with a generous supply of liquidity. And that with interest rates remaining exceptionally low. This is how we counter the risk of a credit crunch. We loosened the monetary policy line again – also through bond purchases.