16:14 - 12.11.2026

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November 12, Fineko/abcnews. In its "2026 Financial Stability Report," Germany’s central bank (Bundesbank) stated that while the German financial system remains resilient, it is operating under mounting pressures from geopolitical tensions, stretched market valuations, real estate vulnerabilities, and rising credit risks.

The report noted that weak profitability and elevated financing costs have pushed monthly corporate insolvencies in Germany to their highest level since 2014, while non-performing loan ratios have been climbing since mid-2025.

The Bundesbank also flagged accelerating capital outflows from open-ended real estate funds, weak demand for office spaces, and growing risks in housing finance, where roughly 40% of new home purchases are financed almost entirely through loans.

Executive Board member Michael Theurer warned that equities—particularly in the US tech sector—and corporate bonds remain overvalued, leaving financial markets highly vulnerable to sharp corrections if earnings expectations fall short or geopolitical risks escalate.