Statement on the publication of the Financial Stability Review 2026, Deutsche Bundesbank

Press conference and key message

At a press conference on 12.11.2026 in Frankfurt am Main, Michael Theurer presented the Deutsche Bundesbank’s Financial Stability Review 2026. The key message of the report is that risks to financial stability remain elevated. The Review cites geopolitical tensions and external headwinds, high and rising government debt, and profound structural challenges in the German economy. It also notes that valuations in financial markets are high and credit risk is growing. The statement frames preparedness under the theme “The readiness is all,” and points to growing interconnectedness, plus vulnerabilities arising from artificial intelligence and digitalisation.

Corporate sector and market valuations

The Review says the macro‑financial environment has changed repeatedly and disruptions are occurring at ever shorter intervals. In 2026 the conflict in the Middle East weighed on economic developments, compounded by trade barriers, supply‑chain disruptions and persistent economic policy uncertainty, with Germany’s export‑based economy particularly affected. Despite these headwinds, valuations of equities and corporate bonds remain high and risk premia are low. The Bundesbank warns that while orderly price corrections can unwind overvaluations, abrupt changes in expectations can lead to sharp, disorderly falls. The Review also documents rising corporate‑sector pressure: monthly insolvencies are at their highest level since 2014 and non‑performing loans have risen since the middle of last year.

Residential lending vulnerabilities and sovereign debt risks

The Review highlights vulnerabilities in new residential real estate lending. It reports that in Q2 2026 just under 40% of new lending volume financed more than 90% of the property value with debt, and for almost 11% of the new lending volume the loan amount exceeded the value of the property being financed. The Bundesbank notes that high loan‑to‑value ratios increase potential losses for lenders in the event of defaults, especially if unemployment rises or residential property prices correct. The Review also draws attention to sovereign risks: it cites European Commission projections in which the euro‑area debt ratio rises from 88% of gross domestic product in 2025 to 105% in 2036, with a debt ratio of around 140% expected for the group of higher‑debt countries by 2036.