Bundesbank: Financial Stability Risks in Germany Still Elevated Amid Geopolitical Tensions, Structural Challenges

10:35 AM EST, 11/12/2026 (MT Newswires) -- Germany's central bank said risks to the country's financial stability remain elevated amid prolonged geopolitical tensions and structural challenges faced by local enterprises. In its latest Financial Stability Review published Thursday, the Deutsche Bundesbank said high financial market valuations, increasing credit risks at German banks, and rising government debt also contribute to the growing risks to financial stability. Artificial intelligence and hybrid threats also increase the possibility of cyberattacks to the financial system as it becomes more digitalized. The Bundesbank, however, noted that the German banking system is stable, with strong positions in both capital and liquidity. "The resilience of the German financial system should be maintained and strengthened in a targeted manner in light of increased operational risks. Given the challenging environment, heightened uncertainty and existing vulnerabilities, macroprudential capital buffers for banks remain appropriate," the central bank said.