The Bundesbank said it had raised its risk provisions, or the money it sets aside to cover losses like a default on eurozone bond holdings, to €14.4 billion, or $18.7 billion, from €7.7 billion a year ago. The bank’s profit for the year, which it transfers to the German government, was little changed, rising to €664 million from €643 million.
“The crisis is not yet over despite the interim calm on financial markets”, Jens Weidmann said. “New risks are continually being acquired and distributed among member nations”, he said as the bank presented its financial results for 2012. “This has left a clear mark on the Bundesbank’s balance sheet.”
Mr Weidmann repeated his contention that the best solution to the eurozone crisis was for countries to get government spending under control and improve the performance of their economies. He said the relative calm on financial markets was due not only to ECB policy, but also to progress by political leaders.
The Bundesbank decision to bolster its reserves may also reinforce fears among Germans that their money is at risk because of European bank policies designed to keep the eurozone from falling apart. The Bundesbank is one of Germany’s most respected institutions, widely regarded as a bulwark against less prudent members of the eurozone.
Mr Weidmann repeated warnings that France was slipping behind because of its failure to carry out economic overhauls. He also expressed concern about elections in Italy last month which failed to produce a clear winner. But he acknowledged that ECB policies had not yet led to an increase in inflation.
Full article
© New York Times
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article