Claudia Buch: Fiscal and monetary responses and financial stability

Introductory statement by Prof Claudia Buch, Vice-President of the Deutsche Bundesbank, prepared for the Panel Discussion at the Financial Stability Conference: "Planning for Surprises, Learning from Crises", virtual, 17 November 2021.

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

Central bank speech  | 
25 November 2021

Thank you very much for giving me the opportunity to speak on this occasion. The topic of this conference comes just at the right time. Ultimately, financial stability means nothing less than a functioning financial system. This, in turn, is the basis for sound fiscal and monetary policy. The Corona pandemic has clearly shown how closely these policy areas interact, and how they support each other:

First, extensive fiscal and monetary policy responses to the Corona pandemic have cushioned its impact on the real economy, thereby – indirectly – protecting the financial system. This has supported financial stability.

Second, vulnerabilities in the financial system with regard to adverse shocks continue to build up. As we are leaving the phase of acute crisis management behind, this reinforces the need to take preventive action in order to mitigate future risks to financial stability.