Sabine Mauderer: Navigating challenging times - a closer look at Europe's financial system

Speech by Dr Sabine Mauderer, Member of the Executive Board of the Deutsche Bundesbank, at the 21st Annual Symposium on Building the Financial System of the 21st Century "An Agenda for Europe and the United States", organised by the Program on International Financial Systems and Harvard Law School, Kronberg, 10 May 2023. 

Central bank speech  | 
10 May 2023

Check against delivery 

1 Introduction 

Ladies and gentlemen,

In response to the high and persistent inflation across the euro area, the ECB has tightened its monetary policy stance. Since last July, we have raised our policy rates by a combined 375 basis points. To support this restrictive stance, the Eurosystem has also started to wind down its asset purchase programme (APP). Since March, we are gradually reducing our bond holdings – currently at a pace of 15 billion euro per month on average until the end of June. We will continue to decrease our APP portfolio at a measured and predictable pace. We expect to stop the reinvestments as of July.

Of course, the tightening of monetary policy has significant consequences for the financial sector. It has put the spotlight on funding, interest rate and liquidity risk. Today, I would like to shine a light on recent developments in Europe's financial markets. I will explain why this is different from 2008, and look at what is next for Europe's financial system.