a quarter of the import share of german exports at just under 41 ½ %. fundamentally, germany ’ s surplus is not due to distortions, but the result of market processes. as the european commission pointed out in its recently published in - depth review, the surplus is the result of an interplay of various factors and developments in germany as well as globally and among its euro - area partners which affected savings and investment in the domestic economy. germany ’ s post - reunification situation was marked by high unit labour costs and high unemployment. to bring real wages down to a market clearing level, a period of wage moderation ensued. this, combined with the realisation that demographic developments would require greater private savings to ensure a comfortable retirement, has caused the saving rate of households to rise gradually over the last decade. a similar picture holds for the development of corporate savings. at the turn of the millennium, german companies were highly leveraged. at the same time, regulatory and tax incentives made equity more attractive by comparison. both developments led companies to scale back investment and bolster their equity positions by retaining earnings – to a point where savings actually exceeded investment, an oddity as far as the corporate sector is concerned. while both household and corporate savings rose, overall investment remained subdued – germany went from being a capital importer in the 1990s to a capital exporter, and so from posting a current account deficit to a surplus. the low level of overall investment is attributable to numerous factors. residential investment fell markedly in the aftermath of the real estate bubble of the 1990s. business investment has been muted on average as well. the overall investment ratio was 16. 7 % in 2013, compared with 22. 3 % in the year 2000. following the sharp downturn induced by the financial crisis, corporate investment rebounded at first, but then fell a second time, as uncertainty due to the crisis in the euro area started to weigh on growth prospects. finally, the consolidation of public finances was accompanied by a fall in public investment. overall, cyclical factors feature prominently when trying to explain the low levels of investment over the last 10 to 15 years. looking ahead, some of these effects can be expected to abate. residential investment has gone up markedly in recent years, fuelled by pent - up housing demand and low interest rates. demographic trends suggest, however, that this development should slow down over the medium term. corporate investment should follow an upward trajectory as well, as uncertainty surrounding the euro area

size in the banking sector. this needs to change. i am convinced that we need to strengthen the principle of proportionality in banking regulation. now some of you might want to stop me at this point and ask : how do you reconcile that with the full and consistent implementation of basel iii that you just advocated? to answer this, let me point to the original idea of the basel rules. the task of the basel committee was, from the outset, to create globally harmonised rules for large, internationally active banks to ensure that they are stable and operate on a level playing field. over time, and especially with basel iii, this resulted in an increasingly complex regulatory framework – a reflection of the mounting complexity of the global banking business. this complexity is warranted for large, interconnected banks, and the sector ’ s global players are certainly in a position to get to grips with the complex rules. but in actual fact, the bulk of these rules, especially in europe, apply not only to major multinational institutions but to every single bank including small savings banks and the majority of cooperative banks. and that has turned out to be quite a problem. because small and medium - sized institutions do not benefit from the same economies of scale that their larger rivals can harness. for example, small institutions face much heavier costs, relatively speaking, when they invest in itinfrastructure or hire additional employees for their compliance department. the implementation of the basel framework in european regulation today already takes account of proportionality to a certain degree. but in practice, i repeatedly encounter situations where, in my view, the existing gradations are inadequate. so the proportionality principle is nothing new, but it hasn ’ t been anchored deeply enough yet. i am very convinced that proportionality is important – for several reasons : it ensures fair competition on a level playing field. it prevents the unwanted side - effect of structural policy through regulation. it strengthens the principle of risk - oriented supervision. it prevents regulation from unnecessarily hampering efficiency. all in all, i think that proportionality is necessary to safeguard the original goals and spirit of the basel framework. 5. addressing proportionality in europe the european union is acknowledging this, and we are taking action. the process started back in 2016 with an initiative launched by the finance ministers from the uk and germany. as we at the bundesbank also felt strongly about the topic, we went public with the first set of specific proposals for addressing proportionality in