financial institutions to be cautious in their valuation and lending practices communication of this kind is considered a “ soft ” macroprudential instrument, as opposed to “ hard ” macroprudential instruments like capital buffers. the decision was based on an analysis of the financial cycle. the financial cycle differs from the business cycle, and it is related to swings in financial variables, such as lending or risk premia. in germany, the financial cycle has been quite expansionary over the past years, even during the pandemic, when gdp ( gross domestic product ) declined by about 5 % in the year 2020 alone. one reason for this is the strong fiscal and monetary support that allowed banks to continue lending. during this period, vulnerabilities to adverse shocks have been building up, though, and risks have increased. hence, the policy package aims at making the banking system more resilient to adverse shocks. this calibration of these instruments takes into account that banks have capital buffers in excess of the minimum regulatory requirements. hence, it was unlikely that these measures would have negative side effects ; the banking system would be able to meet the higher capital requirement without reducing lending or raising additional capital. moreover, banks had one year to comply with the new requirements, which came into force this february 2023, allowing for a gradual adjustment. in a fourth step, the effects of macroprudential policy instruments need to be assessed in an ex post evaluation. this step provides information about the effectiveness of the measure ( s ) taken, about intended or unintended side effects, and it also serves as an input into a possible recalibration of the policy instruments. [ 9 ] analytical work done at the bundesbank found that the macroprudential policy package served its purpose of increasing the resilience of the banking system. there is no evidence of any negative side effects. this ex post evaluation needs to take into account that the macroeconomic environment has changed since the decision to activate the measures : interest rates increased significantly in 2022, and the macroeconomic outlook has worsened. yet, there are no signs right now that would indicate a contraction in lending driven by the macroprudential instruments. [ 10 ] the recent slowdown in mortgage lending is likely due to higher interest rates and banks being more cautious in the current environment, and therefore a natural market response. of course, good policy evaluation requires good data. as part of its statutory mandate, the bundesbank com

##piles monetary, financial, and foreign trade statistics. numerous datasets are also collected within the scope of its banking supervisory tasks. this information forms the basis for the monetary policy decision - making process, macroeconomic and financial stability analyses. the bundesbank is thus one of the largest “ data producers ” in germany. recently, it broadened its focus on aggregated statistics by adding an infrastructure for the provision and use of microdata. data collected by the bundesbank include information on banks, such as the monthly balance sheet statistics, securities holdings statistics, the anacredit credit registry as well as balance sheet data for non - financial corporations. in addition, banking supervision data and data obtained from bundesbank surveys of households ’ and firms ’ expectations are available for analysis. lastly, the bundesbank holds data collected under eu ( european union ) regulations on securities transactions. some of these datasets are available for scientific research projects and can be accessed via the bundesbank ’ s research data and service centre ( rdsc ( research data and service centre ) ). [ 11 ] the rdsc ( research data and service centre ) offers anonymised datasets on banks, securities, investment funds, firms and households, ensures compliance with data confidentiality requirements, and guarantees the quality of the data provided. moreover, numerous macroeconomic time series published in the bundesbank ’ s time series databases are freely available on the bundesbank ’ s statistics page. 3 understanding frictions in markets one important friction in financial markets that can endanger financial stability is the too - big - to - fail ( tbtf ) externality. financial institutions can become too big to fail because of their size, because of their complexity, or because of their interconnectedness with other parts of the financial system. the failure of such institutions can thus put the functioning of the entire financial system at risk. in a crisis, governments thus often stepped in to prevent the system from failing. this, in turn, created expectations of future bail - outs, thus incentivising systemically important financial institutions to take on excessive risk. since the global financial crisis, a number of reforms have been implemented to mitigate the tbtf problem and the underlying moral hazard. in a nutshell, large and systemically important banks have to meet higher capital requirements than smaller ones ; they are subject to more intensive supervision ; and new resolution regimes have been implemented that ensure that even a larger bank in distress