Jens Weidmann: Introductory statement

Speech by Dr Jens Weidmann, President of the Deutsche Bundesbank and Chair of the Board of Directors of the Bank for International Settlements, at the virtual club evening of the International Club of Frankfurt Economic Journalists, 31 March 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

1 Introduction

Dear club members,

A very good evening to you all. I look forward to a stimulating exchange of views with you today. If circumstances were different, I would be welcoming you in person to the Bundesbank just like I did at our past gatherings. What's preventing me from doing so this year fits in here. A mathematician from the UK recently calculated the total volume of SARS-CoV-2, and found that all the coronavirus of this type – the kind that's plaguing humanity right now – could fit inside a single softdrink can. The global crisis unleashed by this tiny virus has hung over our day-to-day lives for more than a year now.

2 Current monetary policy

Since then, monetary policy, too, has been in crisis mode. The early days of the pandemic in particular saw significant uncertainty materialise in financial markets. It was crucial, in that initial phase, to ensure that banks were still able to supply credit. The aim for monetary policymakers was to avoid a situation where normally sound businesses run into payment difficulties just because banks spooked by the crisis cut back on their lending. Adverse feedback loops between the financial systemand the real economy might otherwise have contributed to a downward spiral and perhaps jeopardised price stability.