andreas dombret and felix hufeld : the bundesbank and bafin – “ the two organisations benefit from each other ’ s specific expertise ” interview with dr andreas dombret, member of the executive board of the deutsche bundesbank, and felix hufeld, chief executive director of bafin, by the “ bafin magazin ” published on 1 august 2013. * * * the bundesbank and bafin are collaborating closely in insurance supervision. in an interview, bundesbank executive board member andreas dombret and bafin chief executive director felix hufeld explain how that collaboration benefits both organisations as well as germany as a financial centre. dr dombret, mr hufeld, under the financial stability act ( finanzstabilitatsgesetz ), the bundesbank and bafin will now also cooperate in supervising insurance companies. how will the supervisory tasks be divided up? hufeld : i can answer that question quickly : microprudential insurance supervision, ie the supervision of individual insurers, insurance groups and pension funds, will remain the sole responsibility of bafin. the bundesbank is not involved. that is thus a different situation than in banking supervision. dombret : the financial stability act mandates the bundesbank to help ensure that the financial system remains stable. it is responsible for macroprudential oversight of all sectors of the financial system – which includes insurers. the act assigns analytical tasks, in particular, to the bundesbank. it is our job to identify potential dangers and assess constellations that could impact financial stability as a whole. these analyses form the basis for the discussions within the financial stability committee, where the federal ministry of finance, bafin and the federal agency for financial market stabilisation add their own input. building on this risk analysis, the financial stability committee may then issue warnings and recommendations. that means that bafin and the bundesbank exchange more information nowadays than they used to. dombret : yes, the financial stability act clearly stipulates that we share all observations, conclusions and assessments required to fulfil our respective tasks. the two authorities will mutually benefit from the information and the special expertise that they exchange. the express legislative intent underlying the act is for us to work hand in hand and swap notes regarding relevant data, facts and evaluations. and we will jointly ensure that this is the case. what does that mean in concrete terms? hufeld : we have

gradual withdrawal in early march. various market contacts as well as incoming data confirm that higher yields and coupons for fixed income assets are creating incentives and opportunities. that is the 3 / 5 bis - central bankers'speeches case not only for price - sensitive investors, but also for structural buyers such as insurers or pension funds. many institutional investors - - – who expanded the illiquid parts of their portfolios over recent years – are regaining their appetite for fixed - income assets. 3. 4 structurally higher inflation? in the short term, the policy focus is on bringing down cyclical inflation – largely deriving from the poly - crises of the past three years. however, there is another twist to the current challenge, which most of you will already be aware of and i will only briefly touch upon today. namely, is the era of structurally low inflation pressure coming to an end? after two decades of subdued price pressure, the tide may well have turned. looking further ahead, changes in underlying trends could intensify inflationary pressures. some people refer to these challenges as the " three ds ". first, deglobalisation, driven by geopolitical tensions and a desire to reduce economic dependencies. related processes have also become known as friendshoring or nearshoring. second, the decarbonisation of the economy, incentivised in particular through carbon pricing, could exert persistent upward pressure – and not just on energy prices. third, demographics – more precisely, the assumption that dwindling labour supply will continue to exert upward pressure on wages. all these factors could turn out to be inflationary over the coming years. that is another reason why the eurosystem must remain vigilant in this regard and ensure that inflation expectations remain well anchored around 2 %. 4. resume ladies and gentlemen, gita gopinath, the imf's first deputy managing director, has summed up the task for central bankers neatly2 : " monetary policy should remain data dependent, be well communicated, and ensure that inflation expectations remain anchored. " i could not agree more. and having a compass of that kind is all the more important in times of elevated uncertainty. this way, we can be confident that the eurosystem will restore price stability in the euro area. 4 / 5 bis - central bankers'speeches 1 https : / / www. bankingsupervision. europa. eu / press / pr / date / 2023 / html