Details from the Bundesbank 2015 annual report
- Any loosening of monetary policy can have long term risks and side effects
- Gradual EZ recovery should continue this year and next
- Low inflation is a challenge for monetary policy
- Downside risks to EZ inflation have increased recently
- The German economy is mostly in a good state
In details from the report, Buba made a profit of €3.2bn in 2015 vs €3bn in 2014, and handed it all over to the government today. Interest income dropped to a record low of €2.3bn vs €3.3bn in 2014. Total assets held were €1tn vs €771bn prior. ECB QE holdings of German government bonds stood at €104bn.
He gave no clues on possible further ECB action by adding to the loosening comment above, that the risk of loose policy were to dangerous to ignore;
"Turning his attention to the ongoing speculation that theECBmight further ease the already highly accommodative monetary policy in response to the very subdued price pressures, Mr Weidmann warned that this could entail longer-term risks and side-effects "that it would be dangerous to simply ignore".
