What is the {term}? Bundesbank

The Bundesbank, or Deutsche Bundesbank, is the central bank of Germany and is the equivalent of the U.S. Federal Reserve. It is located in Frankfurt, Germany and has a group of nine regional offices throughout the country in Berlin, Dusseldorf, Frankfurt am Main, Hamburg, Hanover, Leipzig, Mainz, Munich and Stuttgart. Like most central banks worldwide, the Deutsche Bundesbank oversees the nation's banking system and monetary policy.


The Bundesbank was once in charge of the German deutsche mark. However, since Germany adopted the euro in January 2002. The Bundesbank is part of the European central banking system. The Deutsche Bundesbank is considered by many to be the most important and stable central bank in the European Union due to Germany's reputation for diligent fiscal and monetary measures.

Organization of the Bundesbank

The Bundesbank is governed by the Executive Board, which is composed of the president, the vice-president and four other members. The members of the Executive Board are appointed by the president of the Federal Republic of Germany. The president serves for eight years, and the current president, who is nominated by the Federal Government, is Dr. Jens Weidman. 

The Bundesbank controls the country's monetary policy to maintain price stability. The bank cooperates with the European Central Bank (ECB) and the other euro-area central banks, which form the Euro system. The president of the Bundesbank President votes on the Governing Council of the ECB.

Maintaining a Stable Currency

The Governing Council of the ECB maintains price stability by applying monetary policy measures to increase the euro area’s average price level below two percent each year. The ECB also controls the interest rates at which commercial banks lend money. Because lending rates affect purchasing and investment decisions, the monetary policy of the ECB influences prices. The Bundesbank also settles the refinancing operations of the Eurosystem, and its experts provide information on Eurosystem monetary and economic policy issues.

The German Economic Boom

Germany is experiencing an economic boom. Bundesbank’s experts expect gross domestic product (GDP) to increase by 2.0% in 2018, 1.9% in 2019 and 1.6% in 2020. In 2017, the German economy 2.5% in the previous year. President Jens Weidman commented, "Overall, the projection paints a picture of an ongoing economic boom, in which increasing supply-side bottlenecks are reflected in strong wage growth and in higher domestic inflation." Economists are expecting weaker growth over the next year because a lack of skilled workers is hampering economic growth, which is limiting the households' disposable income and consumer spending.