Monthly Report March 2015 Vol 67 No 3 Deutsche Bundesbank Monthly Report March 2015 2 Deutsche Bundesbank Wilhelm-Epstein-Strasse 14 60431 Frankfurt am Main Germany Annual and weekly publishing schedules for Postal address selected statistics of the Deutsche Bundes- Postfach 10 06 02 bank can be downloaded from our website. 60006 Frankfurt am Main The statistical data are also published on the Germany website. Tel +49 69 9566 0 The Monthly Report is published by the Deutsche Bundesbank, Frankfurt am Main, Fax +49 69 9566 3077 by virtue of section 18 of the Bundesbank Act. It is available to interested parties free of http://www.bundesbank.de charge. Reproduction permitted only if source is stated. This is a translation of the original German- language version, which is the sole authorita- ISSN 0418-8292 (print edition) tive text. ISSN 1862-1325 (online edition) The German original of this Monthly Report went to press at 11 am on 20 March 2015. Deutsche Bundesbank Monthly Report March 2015 3 Contents Commentaries .......................................................................................................... 5 Economic conditions ........................................................................................................... 5 Public finances .................................................................................................................... 7 Securities markets ............................................................................................................... 10 Balance of payments ........................................................................................................... 11 Approaches to strengthening the regulatory framework of European monetary union ............................................................................. 15 The importance of macroprudential policy for monetary policy ........... 39 Welfare- theoretical thoughts on possible monetary policy objectives ................................. 45 Effects of monetary policy on risk taking ............................................................................ 50 Model- based analysis of the interaction between monetary and macroprudential policy ... 56 “Financial dominance” as a potential problem for monetary policy ................................... 65 German balance of payments in 2014 ............................................................ 73 European Commission steps up the macroeconomic imbalance procedure for Germany .... 75 Effects on the cross-border investment income balance: asset accumulation, portfolio shifts and changes in yields .................................................................................. 81 Recording euro currency in the balance of payments and the international investment position .............................................................................................................................. 91 Securities holdings statistics for analysing holdings of securities in Germany and Europe: methodology and results ................................... 95 Methodology for deriving transactions from flows in securities holdings on a security- by- security basis ............................................................................................ 99 Deutsche Bundesbank Monthly Report March 2015 4 Statistical Section.................................................................................................... 1• Key economic data for the euro area .................................................................................. 5• Overall monetary survey in the euro area ............................................................................ 8• Consolidated financial statement of the Eurosystem ............................................................ 16• Banks .................................................................................................................................. 20• Minimum reserves ............................................................................................................... 42• Interest rates ....................................................................................................................... 43• Insurance corporations and pension funds .......................................................................... 48• Capital market .................................................................................................................... 50• Financial accounts ............................................................................................................... 54• Public finances in Germany ................................................................................................. 58• Economic conditions in Germany ........................................................................................ 65• External sector .................................................................................................................... 74• Overview of publications by the Deutsche Bundesbank .......................... 83• Abbreviations and symbols e Estimated p Provisional pe Partly estimated r Revised … Data available at a later date . Data unknown, not to be published or not meaningful 0 Less than 0.5 but more than nil – Nil Discrepancies in the totals are due to rounding. Deutsche Bundesbank Monthly Report March 2015 5 Commentaries Economic conditions The intake of orders in German industry in … and in orders January was a seasonally adjusted 4% down on received Underlying trends the month. Its level in December was extremely high, however. Orders on an average of De- Strong economic The first quarter of 2015 is likely to have seen a cember and January were thus 1¼% higher growth expected further sharp increase in German economic than in October and November. This applied in 2015 H1 output following its surprisingly strong expan- equally to domestic orders, orders from the rest sion at the end of 2014. A continuation of this of the euro area and orders from non- euro- buoyant upward cyclical movement is indicated area countries. The key factor here was a larger for the second quarter as well. The main drivers volume of major orders. Orders of capital in this context are external demand, private goods went up by 2% and orders of intermedi- consumption and, to a lesser extent, housing ate goods by ¾%. This contrasted with a ¾% construction. Furthermore, there are signs of decline in orders of consumer goods. something of an upturn in corporate invest- ment. The consumer climate, which has been Industrial sales in January were 1¼% up on the Higher export sustained for some time now by a positive la- month after seasonal adjustment. Compared sales, perceptible rise in real bour market outlook and large wage increases, with the average of the previous quarter, the imports has gained significant momentum of late increase was 1¾%. Growth in export sales owing to considerable energy- related gains in (+2¾%) was significantly larger than the in- purchasing power and additional government crease in domestic sales (-½%). The rise in non- transfers. The fourth quarter of 2014 saw a dis- euro- area countries (+3½%) was sharper than tinct increase not only in private consumption, in the rest of the euro area (+1½%). Seasonally however, but also in the household saving adjusted exports of goods in January did not ratio. The additional real scope for expenditure quite match the figure for the final quarter of was therefore not yet being fully utilised. The 2014 (-¾%). On a more informative two- sharp rise in retail sales in January indicates that month comparison of December and January this is now increasingly the case. against October and November, however, there was an increase of 1%. In nominal terms, im- ports in January were likewise somewhat down Industry on their level in the previous quarter (-½%). In real terms, however, they picked up markedly, Underlying In seasonally adjusted terms, there was no fur- chiefly on account of the decline in oil prices. upward trend ther increase in industrial output in January in industrial output … compared with its December level, which was revised upwards markedly by ¾%. The key fac- Construction tor here was probably a “bridge day” effect, signs of which were particularly evident in the Seasonally adjusted construction output in Strong increase automotive sector. The figure was still 1% up January was 5% higher than the figure for De- in construction output, some- on the average level of the fourth quarter, cember, which had already undergone a sharp what fewer con- which indicates the underlying upward trend in upward revision. Compared with the average struction orders industrial output. Compared with the final of the final quarter of 2014, there was an in- quarter of 2014, the largest increase was in crease of 4¾%. Output in the main construc- capital goods production at +1¼%, followed tion sector rose by 2%, buoyed by the com- by intermediate goods at +¾% and consumer paratively mild winter weather. Orders received goods at +½%. in the main construction sector in the final Deutsche Bundesbank Monthly Report March 2015 6 quarter of last year – more recent data are un- Economic conditions in Germany * available – did not quite equal their level in the third quarter, showing a decline of ¼%. This was due to a fall in orders, mainly from the Seasonally adjusted public sector but also from industry, which was Orders received (volume); 2010 = 100 not entirely offset by the extremely strong in- Industry crease