Prof. Dr. Franz-Christop Zeitler, who is vice president of the German Bundesbank, had a sceptical opinion in an interview with the weekly “Capital Investor” financial magazine. He believes that the international financial crisis is not over yet. “All in all I expect the German economy to grow by 1.5% in the year 2008.” At the end of last year the Bundesbank had still forecast economic growth amounting to 1.6%. According to Mr. Zeitler, growth in Germany is in particular curbed by the financial crisis, a weaker US economy and price rises.
The financial crises was a “serious test for the international financial system”, says Zeitler. He called on bank directors to work on gaining back trust. The vice president, however, also warned against an overregulation through regulatory bodies. Even though “Basel II” should be revised and the rules for major loans be defined more precisely, “another regulatory wave in the form of a kind of “Basel III” was, however, not necessary.”
Against the backdrop of a weak dollar Zeitler warned against selling the gold reserves of the Bundesbank, something which had been repeatedly demanded by policy makers. “Besides reserves of foreign currencies gold is an important pillar of trust in our common European currency.” This significance is currently particularly obvious. “Gold apparently secures risks which cannot be covered in such a way by currencies”, said Mr. Zeitler.