in – have been brought into line with international standards. [ 6 ] also at the international level, the fsb is currently evaluating the impact of too - big - tofail reforms. [ 7 ] a corresponding consultative report will be published in june 2020. footnotes : 1. this figure refers to lending to domestic households and enterprises. 2. the bundesbank estimates that house prices in german towns and cities were overvalued by between 15 % and 30 % in 2018. see deutsche bundesbank ( 2019 ), monthly report, february 2019. the fundamentals include per capita real estate holdings, per capita income, population density, and the age structure of the population. 3. see robert j. shiller ( 2019 ), narrative economics : how stories go viral and drive major economic events. princeton university press. oxford and princeton. 4. relevant indicators include, amongst others, aggregate debt as a percentage of household income as well as the percentage of household income needed to make interest and redemption payments. 5. see task force on climate - related financial disclosures ( 2017 ), final report, financial stability board. 6. in this context, the minimum requirement for own funds and eligible liabilities ( mrel ) was revised. 7. https : / / www. fsb. org / 2019 / 05 / fsb - launches - evaluation - of - too - big - to - fail - reforms - andinvites - feedback - from - stakeholders /

following in the footsteps of other european countries that have activated or increased the countercyclical capital buffer. bafin followed this recommendation and raised the buffer to 0. 25 % of risk - weighted domestic exposures in the third quarter of 2019. banks have 12 months to build up the buffer, and, for the most part, they may use their surplus capital to meet the requirement. the recommendation makes allowances for uncertainty about economic developments. future adjustments to the countercyclical capital buffer will depend on whether and to what extent cyclical risks continue to build up in the financial system. the financial cycle, and not the economic cycle, is the relevant factor here. 5 need for action to ensure a stable financial system digitalisation, climate change, demographic change, and globalisation are megatrends that are impacting all areas of the economy and society. the financial sector mirrors these developments and, at the same time, is a key catalyst for the necessary structural change. for the first time, this year ’ s financial stability review features a chapter on the impact of climate - related risks on the financial system. in this context, our goal is not to evaluate climate - policy decisions. instead, we aim to analyse the impact of climate change as well as the political, social and economic responses. to this end, more than 45 central banks and supervisors worldwide have joined forces in the network for greening the financial system ( ngfs ), pooling their methodological capabilities and building up a robust information base. at the international level, the financial stability board ’ s ( fsb ) task force on climaterelated financial disclosures undertook important preliminary work for co2 risks to be better disclosed in enterprises ’ balance sheets. in order to tackle climate change effectively, it is necessary to implement a policy regime that adjusts the relative prices between carbon - intensive and low - carbon economic activities. this, in turn, necessitates significant structural change. a functioning financial system is key to ensuring that structural change can succeed without hampering innovation or jeopardising stability. however, structural change has also not stopped short of the financial sector itself. banks – just like firms in other economic sectors – must therefore be allowed to withdraw from the market or to shrink if their business strategies are no longer sustainable. an effective resolution and restructuring regime can help market mechanisms to function properly. with the banking package recently passed by the eu, key regulations on creditors participating in losses – known as a bail -