Overview
- Citing its Financial Stability Report published on Thursday, November 12, 2026, the Bundesbank said the German financial system is currently resilient but faces elevated, interconnected risks that could trigger disorder if left unaddressed.
- The bank singled out richly valued markets—especially US technology and AI stocks—and warned that sharp price falls there could spread through corporate bonds and banks’ funding channels.
- The Bundesbank called the eurozone’s rising public debt trajectory ‘toxic,’ citing EU Commission projections that push debt ratios higher over the next decade and create losses for banks, insurers and funds holding sovereign bonds.
- Lending stress has increased since mid‑2025, with monthly insolvencies at multi‑year highs and new residential loans showing nearly 40 percent with loan‑to‑value ratios above 90 percent and about 11 percent where loans exceed property value.
- To limit contagion the Bundesbank urged measures that make capital buffers actually usable, tighten reporting and data on private‑credit and funds, and deploy targeted macroprudential tools such as concentration limits or capital add‑ons for sovereign exposures.