risk to be fairly low reflects past developments, first and foremost. during the pandemic, insolvencies in the corporate sector actually decreased despite a sharp decline in gdp ( chart 11 ) – thanks to extensive government measures. credit risk was at a commensurately low level. the time series on which banks are basing their estimated future credit risks could therefore paint an excessively optimistic picture of the future. so the fact that increasing credit risks have not yet filtered through to loan loss allowances definitely does not constitute an allclear signal. seite 13 von 18 deutsche bundesbank, directorate general communications wilhelm - epstein - strasse 14, 60431 frankfurt am main, germany, tel. : + 49 ( 0 ) 69 9566 33511, fax : + 49 ( 0 ) 69 9566 33077 presse @ bundesbank. de, www. bundesbank. de reproduction permitted only if source is stated. chart 12 furthermore, banks ’ capital ratios have fallen slightly since the middle of last year. there are two reasons behind this : the continued fairly dynamic increase in loans and write - downs on securities, which have already taken place. the tier 1 capital ratios of savings banks and credit cooperatives and of large, systemically important banks have fallen by around one percentage point ( chart 12 ). 8 the unweighted capital ratios, too, declined during this period. in january 2022, the federal financial supervisory authority ( bafin ) therefore announced a package of macroprudential measures to strengthen bank resilience. the countercyclical capital buffer was raised to 75 basis points of domestic risk exposures in a move to enhance resilience to general macroeconomic risks contained in the loan portfolios. the sectoral systemic risk buffer was set at 2 % for loans secured by domestic residential real _ _ _ _ _ _ _ _ _ _ _ _ _ the tier 1 capital ratios of large, systemically important banks stood at around 18 % in mid - 2021 and at 17 % in the middle of 2022. the tier 1 capital ratio of savings banks and credit cooperatives was around 16 % in mid - 2021 and just over 15 % in mid - 2022. seite 14 von 18 deutsche bundesbank, directorate general communications wilhelm - epstein - strasse 14, 60431 frankfurt am main, germany, tel. : + 49 ( 0 ) 69 9566 33511, fax : + 49 (

. de reproduction permitted only if source is stated. what is clear : we need a resilient financial system that functions even during periods of stress and can support structural change in the real economy. banks need to be able to absorb losses without external assistance. otherwise, there is the risk of a credit crunch that would exacerbate a crisis in the real economy. so what does the risk situation look like? chart 1 it ’ s plain to see that the risks to economic activity are clearly tilted to the downside. a slight recession has been forecast for 2023. 2 to gauge the future stability of the financial system, we look particularly closely at very negative developments. above all, an intensified energy crisis would be a considerable drag on the real economy ( chart 1 ). gas rationing would be a problem since money cannnot make up for a gas shortage. and there are _ _ _ _ _ _ _ _ _ _ _ _ _ see https : / / www. sachverstaendigenratwirtschaft. de / fileadmin / dateiablage / gutachten / jg202223 / jg202223 _ chapter _ 1. pdf seite 3 von 18 deutsche bundesbank, directorate general communications wilhelm - epstein - strasse 14, 60431 frankfurt am main, germany, tel. : + 49 ( 0 ) 69 9566 33511, fax : + 49 ( 0 ) 69 9566 33077 presse @ bundesbank. de, www. bundesbank. de reproduction permitted only if source is stated. other risks as well. the international monetary fund stresses risks to global growth and financial stability in its recent reports. 3 that ’ s not good news, for a german economy that is highly interconnected internationally. chart 2 germany ’ s strong dependence on imported energy and the rise in energy prices also mean a decline in real incomes. roughly 95 % of german gas consumption alone comes from imports. the stoppage of russian deliveries in particular has caused gas and energy prices to soar ( chart 2 ) – and that surge in prices will only recede gradually. this means we are having to pay more for our imports than we are getting for our exports – the terms of trade have fallen by more than 10 % this year. 4 it ’ s a situation not unlike the oil price shock in the 1970s. _ _ _ _ _ _ _ _ _ _ _ _ _ see https : /