Economic crisis worries Bundesbank's Weber
Published on: 26 Jan 2009 11:28 CET
“I cannot remember when the economy has simultaneously collapsed worldwide so sharply,” Weber told daily Bild. “It worries me that it still hasn’t been possible to contain the crisis on the financial markets.”
The head of the Bundesbank, Germany’s central bank, said what started as problem for the banking sector had now become a full-blown economic crisis affecting the entire world. “There haven’t been problems of this scope on the markets in decades,” he said.
But Weber said he was hopefully Germany’s labour market would weather the worst of the economic downturn. “I don’t expect a dramatic rise in unemployment in 2009,” he told the paper. “Any comparison with the Great Depression in the 30s is exaggerated. This crisis won’t lead to mass unemployment again.”
Weber also rejected the idea of creating a so-called bad bank in Germany to help out the country’s financial institutions by taking over their risky investments and loans. “Right now I don’t see the need for bad bank and the Bundesbank has no plans for one,” he said.