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Finanzierung des Übergangs zu Klimaneutralität ? Kosten und Instrumente | Rede an der Adam Smith Business School University of Glasgow
1 Einleitung
Meine sehr geehrten Damen und Herren,
ich freue mich sehr, heute bei Ihnen hier in Glasgow sein zu dürfen. Welcher Ort wäre geeigneter, um über die wirtschaftlichen Auswirkungen des Klimawandels und den Übergang zu einer klimaneutralen Wirtschaft zu sprechen ? und das nicht nur, weil Glasgow 2021 Gastgeber der Weltklimakonferenz der Vereinten Nationen war.
Hier forschte und lehrte Adam Smith, der Vater der modernen Ökonomie. Haben Sie sich jemals gefragt, was er zum Klimawandel gesagt hätte? Ich weiß, der berühmte Vordenker der freien Marktwirtschaft ist vielleicht nicht der erste, der einem hierzu in den Sinn kommt. Doch selbst Adam Smith musste zugeben, dass die ?unsichtbare Hand? zuweilen suboptimale Ergebnisse hervorbringt.
Der Klimawandel ist dafür das perfekte Beispiel, denn die negativen Auswirkungen der Treibhausgasemissionen spiegeln sich nicht in den Marktpreisen wider. Glücklicherweise herrscht mittlerweile weitgehend Konsens darüber, dass die Regierungen private Haushalte und Unternehmen aktiv dazu bewegen müssen, ihre Emissionen zu reduzieren.
Der Übergang zu einer Wirtschaft mit Netto-Null-Emissionen ist eine große Herausforderung. Er erfordert eine Veränderung unseres Verhaltens, Innovationen und umfangreiche Investitionen, um unseren Kapitalstock wieder aufzubauen. Und er verlangt umfangreiche Finanzierungsmittel.
Ich möchte heute mit Ihnen darüber sprechen, wie die Finanzierung des Übergangs zu einer klimaneutralen Wirtschaft aussehen könnte. Dabei will ich mich auf zwei wesentliche Punkte konzentrieren. Zum einen, wie viele Investitionen erforderlich sind, um Klimaneutralität zu erreichen und wie viele davon ?zusätzlich? sind. Zum anderen, wie der Finanzierungsmix aussehen könnte, um diese Investitionen zu ermöglichen.
Ich weiß, dass die Antwort auf diese Fragen zunächst recht schwierig erscheinen mag ? a taughy fleece tae scoor. Aber ich werde mich bemühen, meine Ausführungen mit verständlichen Beispielen aus der Praxis zu veranschaulichen. Dabei soll es auch um Elektromobilität und Heizungssysteme gehen, um zu verdeutlichen, wo die Stolpersteine liegen.
Ich werde mich in erster Linie auf die Europäische Union (EU) beziehen und auch die eine oder andere Erkenntnis aus Deutschland einfließen lassen. Leider bleibt das Vereinigte Königreich in den zur Verfügung stehenden Daten unberücksichtigt. Ich werde jedoch mein Möglichstes tun, um Erkenntnisse mit Ihnen zu teilen, die auch für Sie relevant sind.
2 Wie viele Investitionen sind erforderlich?
Ich möchte mit der Frage beginnen, wie viel die EU investieren muss, um klimaneutral zu werden. Das Paket ?Fit für 55? der EU verfolgt das Ziel, die Netto-Treibhausgasemissionen bis 2030 um mindestens 55 Prozent zu senken. Diese Senkung soll gegenüber den Emissionswerten von 1990 erreicht werden. Das heißt, sie ist nur ein Zwischenschritt auf dem Weg zur vollständigen Klimaneutralität, wofür die EU erst noch die rechtlichen Grundlagen schaffen muss.
Die Europäische Kommission schätzt den Investitionsbedarf der EU-Mitgliedstaaten zwischen 2021 und 2030 auf über 1,2 Billionen Euro jährlich.[1] Das sind fast 8 Prozent des EU-weiten BIP. Den Löwenanteil davon muss der private Sektor stemmen. Der Investitionsbedarf liegt also signifikant höher als das Investitionsvolumen der vergangenen zehn Jahre von 760 Milliarden Euro jährlich.
Die Europäische Kommission spricht im Zusammenhang mit der Lücke zwischen den erforderlichen und den tatsächlichen Investitionen von einem ?zusätzlichen? Investitionsbedarf. Dieser zusätzliche Investitionsbedarf beläuft sich auf 480 Milliarden Euro bzw. etwa 3 Prozent des BIP.
Diese Definition einer ?zusätzlichen? Investition ist aus buchhalterischer Sicht ausgesprochen praktisch. Sie vermittelt auf Anhieb eine klare Vorstellung davon, wie viel Mehrinvestitionen die EU tätigen muss, um ihre Klimaziele zu erreichen. Aus Finanzierungssicht ist es allerdings hilfreich, zusätzliche Investitionen anders zu definieren.
Es gibt zwei Arten von Investitionen, die zur Erreichung der Klimaneutralität erforderlich sind. Bei der ersten handelt es sich um Investitionen, die nicht getätigt würden, wenn es das Ziel einer Verringerung der Treibhausgasemissionen nicht gäbe. Ein Musterbeispiel für diese Art von Investitionen ist Technologie zur Abscheidung und Speicherung von CO2. Sie spielt eine entscheidende Rolle in Sektoren, in denen eine Dekarbonisierung nur schwer umzusetzen ist. Diese Investitionen erfordern wirtschaftliche Ressourcen und Finanzierungen, die über das hinausgehen, was eine Volkswirtschaft zum Erhalt ihres Kapitalstocks aufwenden muss.
Bei der zweiten Art handelt es sich um Investitionen zur Ersetzung von Technologien, die auf fossilen Brennstoffen basieren, durch klimaneutrale Alternativen. Ich möchte das an einem Beispiel erläutern: Stellen Sie sich zwei Familien vor, die ein neues Auto kaufen. Familie Jones gibt 45 000 Euro für ein neues Fahrzeug mit Verbrennungsmotor aus. Aus technischer Sicht tätigt Familie Jones eine Ersatzinvestition. Eine zusätzliche Finanzierung ist nicht erforderlich. Familie Smith beschließt dagegen, ihr altes Auto durch ein Elektrofahrzeug zu ersetzen. Nehmen wir einmal an, ein vergleichbares Elektrofahrzeug kostet 50 000 Euro. Davon sind 45 000 Euro eine Ersatzinvestition. Nur die verbleibenden 5 000 Euro erfordern eine zusätzliche Finanzierung.
Betrachten wir nun, wie die Europäische Kommission zusätzliche Investitionen definiert: Sie subtrahiert den Jahresdurchschnittswert von Elektrofahrzeugen, die in der Vergangenheit gekauft wurden, von dem Wert der Elektrofahrzeuge, die zur Erreichung ihrer Klima-Zwischenziele benötigt werden. Dabei lag die Zahl zugelassener Elektrofahrzeuge in der Vergangenheit deutlich unter dem, was hierfür erforderlich ist. Die zusätzlichen Investitionen, wie sie aus der buchhalterischen Sicht der Europäischen Union definiert werden, liegen damit vermutlich deutlich höher als der zusätzliche Finanzierungsbedarf.
Wie hoch könnte dieser zusätzliche Finanzierungsbedarf sein? Es gibt zwar keine entsprechenden Daten für die EU, aber für Deutschland liegen uns Zahlen vor. Eine kürzlich durchgeführte Studie geht davon aus, dass Deutschland zwischen 2021 und 2030 jährlich etwa 390 Milliarden Euro investieren muss, um seine Treibhausgasemissionen gegenüber 1990 um 65 Prozent zu senken.[2] Dieser absolute Gesamtbetrag wurde auf Basis der Preise von 2020 ermittelt. Bezogen auf das BIP belaufen sich die Investitionen auf 11 Prozent.
Das ist gar nicht weit entfernt von den 8 Prozent, die die Europäische Kommission für die EU berechnet hat. Allerdings erfordern nur etwa 30 Prozent dieser Investitionen eine zusätzliche Finanzierung. Das entspricht insgesamt einer Summe von ungefähr 120 Milliarden Euro.[3]
Lassen Sie mich eine kurze Zwischenbilanz ziehen, welche beiden wichtigen Schlüsse wir aus dem bisher Gesagten ziehen können. Erstens erfordert die Erreichung der Klimaneutralität erhebliche Investitionen. Doch in vielen Fällen werden Technologien auf Basis fossiler Energien einfach durch klimaneutrale Alternativen ersetzt. Der zusätzliche Finanzierungsbedarf fällt daher deutlich geringer aus und lässt sich offenbar bewältigen.
Zweitens können wir den zusätzlichen Finanzierungsbedarf minimieren, wenn der zu ersetzende Kapitalstock bereits weitgehend abgeschrieben ist. Einen noch recht neuen Kapitalstock zu ersetzen, der kaum abgeschrieben ist, würde dagegen die wirtschaftlichen und finanziellen Kosten in die Höhe treiben. Lassen Sie mich dies anhand eines kurzen Beispiels erläutern.
Am 1. Januar 2024 brachte die Bundesregierung ein neues Gesetz zu Heizungsanlagen auf den Weg, das Gebäudeenergiegesetz. Darin wurde festgelegt, dass Heizungsanlagen künftig zu rund zwei Drittel mit erneuerbaren Energien betrieben werden müssen. Im Vorgriff auf dieses neue Gesetz tauschten viele private Haushalte ihre alten Gasheizungen aus. Die neuen Heizungsanlagen haben eine Lebensdauer von etwa 25 Jahren, müssen also über einen langen Zeitraum abgeschrieben werden.
Wer sich allerdings in Mannheim für eine neue Gasheizung entschieden hat, steht nun vor einem Problem, denn der lokale Gasanbieter beabsichtigt, seine Lieferungen 2035 einzustellen. Somit wird eine langfristige Investition zu einem Zeitpunkt unrentabel, zu dem sie gerade einmal etwas mehr als zur Hälfte abgeschrieben ist ? eine Vergeudung finanzieller und wirtschaftlicher Ressourcen.
Dieses Beispiel schenkt uns eine wesentliche Erkenntnis: Um kein Geld zu verschwenden, benötigen wir auf dem Weg zur Klimaneutralität eine klare und verbindliche Marschroute. Nur mit einer solchen Marschroute vor Augen haben die Menschen das Vertrauen, in den Übergang zu einer klimaneutralen Wirtschaft zu investieren.
3 Wie könnte der Finanzierungsmix aussehen?
Schauen wir uns nun an, wie ein möglicher Finanzierungsmix aussehen könnte. In eine klimaneutrale Wirtschaft müssen alle investieren ? die privaten Haushalte, die Unternehmen und der öffentliche Sektor. Für diese Investitionen kommen sowohl Innenfinanzierungs- als auch Außenfinanzierungsmittel infrage.
Wie der Name schon vermuten lässt, schöpft die Innenfinanzierung aus eigenen Mitteln. So legt zum Beispiel unsere Familie Smith einen Teil ihres Einkommens beiseite, um sich ein neues Auto zu leisten. Oder denken Sie an Unternehmen, die ihre Produkte verkaufen und aus einem Teil des Gewinns Rücklagen bilden. Auch das ist Innenfinanzierung. Bei der Außenfinanzierung werden die Mittel hingegen extern bereitgestellt, etwa von Banken oder Investoren.
Was den Finanzierungsmix angeht, gibt es beträchtliche Unterschiede zwischen privaten Haushalten, nichtfinanziellen Unternehmen und dem öffentlichen Sektor. Die privaten Haushalte tendieren dazu, größere Summen anzusparen, und nutzen vor allem Bankkredite als Möglichkeit der Außenfinanzierung. Der öffentliche Sektor bedient sich dagegen im Wesentlichen der Außenfinanzierung, indem er Schuldverschreibungen begibt. Nur bei den Unternehmen ist der Finanzierungsmix ausgewogener. Hier spielen Eigenkapital und Bankkredite eine wichtige Rolle. Diese Aussagen gelten im Übrigen gleichermaßen für die EU wie für das Vereinigte Königreich und Deutschland.
Wie könnte der Finanzierungsmix für den Übergang zu einer klimaneutralen Wirtschaft also aussehen? Um dies beurteilen zu können, müssen wir zwei wichtige Größen kennen: zunächst einmal den Anteil der privaten Haushalte, der Unternehmen und des öffentlichen Sektors am Gesamtinvestitionsvolumen. Grobe Schätzungen der Bundesbank für Deutschland gehen davon aus, dass die privaten Haushalte für etwa ein Drittel der Investitionen verantwortlich zeichnen müssten, der öffentliche Sektor für etwa 20 Prozent und die Unternehmen für etwas weniger als die Hälfte.[4]
Darüber hinaus benötigen wir Schätzungen zur künftigen Finanzierungsstruktur der Sektoren. Wir gehen davon aus, dass sich die künftigen Finanzierungsstrukturen nicht von den gegenwärtigen unterscheiden werden.[5] Das setzt allerdings voraus, dass die Finanzierungsstrukturen der Vergangenheit für künftige Klimainvestitionen geeignet sind. Sollte dies nicht der Fall sein, weil unter Umständen innovative Finanzierungsinstrumente benötigt werden, könnte die Finanzierungsstruktur künftig anders aussehen.
Was ergibt sich aus diesen beiden Größen? Für Deutschland gehen wir davon aus, dass etwa 20 Prozent des Finanzierungsmix aus der Innenfinanzierung stammen könnte, in erster Linie Sparvermögen privater Haushalte. Was die Außenfinanzierung angeht, so dürften Bankkredite die wichtigste Rolle spielen. Sie machen mehr als ein Viertel des geschätzten Finanzierungsmix aus. Vor allem die privaten Haushalte bestreiten fast ihre gesamte Außenfinanzierung über Banken.
Die zweitwichtigste Möglichkeit der Außenfinanzierung könnten Schuldverschreibungen ausmachen, und dies in einem Umfang von etwa 20 Prozent. Der öffentliche Sektor spielt hier eine wichtige Rolle, wobei die Mittel fast ausschließlich aus Anleihen stammen. Die drittwichtigste Außenfinanzierungsquelle könnte schließlich Eigenkapital darstellen, und zwar im Umfang von etwa einem Sechstel. Unternehmen sind die einzigen Nutzer dieser Finanzierungsmöglichkeit, da die privaten Haushalte und der öffentliche Sektor keine Eigenkapitalinstrumente emittieren. Das verbliebene Sechstel des gesamten Investitionsbedarfs könnte durch unterschiedliche Finanzierungsinstrumente wie Darlehen von Nichtbank-Finanzintermediären bestritten werden.
Was bedeutet das nun für die EU und das Vereinigte Königreich? Treffen die Zahlen aus Deutschland auch auf sie zu? Glücklicherweise lassen sich die Finanzierungsstrukturen von privaten Haushalten, Unternehmen und Staaten in weiten Teilen auf diese Regionen übertragen.[6] Daher erweist sich eine der beiden Größen dieser Berechnung als weitgehend deckungsgleich.
Die zweite Größe ? der Investitionsbedarf der einzelnen Sektoren ? ist dagegen weniger greifbar. Ich persönlich kenne keine Studien für die EU oder das Vereinigte Königreich, die den Investitionsbedarf nach privaten Haushalten, Unternehmen und öffentlichem Sektor aufschlüsseln.[7] Mangels besserer Alternativen ermöglichen uns die Zahlen für Deutschland eine erste plausible Schätzung für die EU und das Vereinigte Königreich.
4 Schlussbemerkungen
Lassen Sie mich mit meinen Ausführungen zum Ende kommen. Zusammenfassend möchte ich drei Kernaussagen mit Ihnen teilen.
Erstens: Der ?zusätzliche? Investitionsbedarf zur Erlangung der Klimaneutralität kann auch aus der Finanzierungsperspektive betrachtet werden. In vielen Fällen werden Technologien auf Basis fossiler Brennstoffe durch klimaneutrale Alternativen ersetzt. Dies erfordert nur dann eine zusätzliche Finanzierung, wenn die klimaneutralen Technologien kostspieliger sind oder der ersetzte Kapitalstock noch nicht vollständig abgeschrieben ist. Der zusätzliche Finanzierungsbedarf ist deutlich geringer als die erforderlichen Gesamtinvestitionen. Ich bin daher zuversichtlich, dass unser Finanzsystem in der Lage ist, die erforderlichen Finanzmittel zu mobilisieren.
Zweitens: Banken könnten zur Finanzierung des Übergangs zu einer klimaneutralen Wirtschaft eine größere Rolle spielen als allgemein angenommen. Diese Annahme liegt vor allem darin begründet, dass ein Großteil der klimabezogenen Investitionen auf die privaten Haushalte entfällt. Sie müssen die Energieeffizienz ihrer Immobilien steigern und ihre mit fossilen Brennstoffen betriebenen Heizungsanlagen durch klimaneutrale Alternativen ersetzen. Dabei verfügen die privaten Haushalte in der Praxis kaum über andere Finanzierungsmöglichkeiten als Bankkredite.
Ein stabiles Banksystem ist daher für eine Erreichung der Klimaneutralität unabdingbar. Aus diesem Grund sind wir bei der Bundesbank fest entschlossen, die Vollendung der europäischen Bankenunion weiter voranzutreiben. Wir müssen allerdings auch den Zugang zu alternativen Finanzierungsquellen verbessern. Vor allem nichtfinanzielle Unternehmen würden erheblich von einer besseren Finanzierung über die Kapitalmärkte profitieren. Daher setzt sich die Bundesbank für die Einrichtung einer europäischen Kapitalmarktunion ein.
Drittens: Die Gesetzgeber können den zusätzlichen Finanzierungsbedarf minimieren, indem sie dafür Sorge tragen, dass der Weg zur Klimaneutralität einer klaren und verbindlichen langfristigen Marschroute folgt. Warum? Weil auf diese Weise Anreize geschaffen werden, keine weiteren Investitionen in Technologien auf Basis fossiler Brennstoffe zu tätigen, die unter Umständen nicht mehr vollständig abgeschrieben werden können, bevor sie unrentabel werden.
Fußnoten:
_ftn_root_1 Vgl. Europäische Kommission (2023), Investment needs assessment and funding availabilities to strengthen EU?s Net-Zero technology manufacturing capacity, SWD (2023) 68 final.
_ftn_root_2 Kemmler et al. (2024), Klimaschutzinvestitionen für die Transformation des Energiesystems, Prognose. Die Studie ist nur auf Deutsch verfügbar.
_ftn_root_3 In Deutschland ist der am BIP gemessene Investitionsbedarf höher als in der EU. Dies liegt daran, dass Deutschland beabsichtigt, bereits 2045 und nicht erst 2050 klimaneutral zu werden.
_ftn_root_4 Die Schätzungen basieren auf den Angaben zum Anteil des öffentlichen Sektors in Brand und Römer (2022), Öffentliche Investitionsbedarfe zur Erreichung der Klimaneutralität in Deutschland, KfW Research???Fokus Volkswirtschaft, Nr. 395 sowie auf verschiedenen Plausibilitätsannahmen. In der Analyse werden Finanzströme vor staatlichen Hilfen (wie Subventionen) betrachtet, und daher wird angenommen, dass sich der öffentliche Sektor nur in geringem Umfang oder gar nicht an den Investitionen in der Industrie und am Wohnungsmarkt beteiligen wird.
_ftn_root_5 Die zugrunde gelegte Finanzierungsstruktur beruht auf dem Durchschnitt der Innen- und Außenfinanzierungsströme im Zeitraum 2018 bis 2022. Dieser Durchschnittswert glättet kurzfristige Schwankungen und stellt das von Kemmler et al. (2024) verwendete Vergleichsjahr 2020 in den Mittelpunkt. Die Innenfinanzierung fließt dabei als Nettowert in die Berechnungen ein, wobei angenommen wird, dass die Ersatzinvestitionen aus den Abschreibungen finanziert werden.
_ftn_root_6 In der EU und im Vereinigten Königreich greifen die privaten Haushalte ein wenig seltener auf Bankkredite zurück als in Deutschland, doch der Anteil ist immer noch hoch. Im öffentlichen Sektor verzeichnet Deutschland einen deutlich höheren Anteil der Finanzierung über die Emission von Schuldverschreibungen, vor allem im Vergleich zur EU. Im Vereinigten Königreich greifen nichtfinanzielle Unternehmen deutlich weniger auf die Eigenkapitalfinanzierung zurück, und der Anteil der (Bank-)Kredite ist im Vergleich zu Deutschland höher. Im Gegensatz dazu verzeichnen nichtfinanzielle Unternehmen in der EU einen etwas größeren Anteil der Eigenkapitalfinanzierung, während der Anteil der (Bank-)Kredite im Vergleich zu Deutschland geringer ausfällt. Alle Angaben basieren auf den durchschnittlichen Finanzierungsströmen im Zeitraum von 2018 bis 2022.
_ftn_root_7 Die Europäische Kommission, a. a. O., geht davon aus, dass der öffentliche Sektor in der EU schätzungsweise 17 bis 20 Prozent des gesamten Investitionsvolumens ausmacht. Allerdings sind keine Angaben darüber enthalten, wie sich diese Investitionen auf private Haushalte und Unternehmen verteilen. Für das Vereinigte Königreich wird in HM Government (2023), Mobilising Green Investment???2023 Green Finance Strategy ausgeführt, dass der Großteil der Investitionen durch den privaten Sektor bestritten werden muss. Allerdings fehlen auch dort nähere Angaben zur Verteilung dieser Investitionen auf private Haushalte und Unternehmen.
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Financing the transition to greenhouse gas neutrality: how much and with which instruments? | Remarks at the Adam Smith Business School University of Glasgow
1 Introduction
Ladies and gentlemen,
I am delighted to be here with you today. What better place than Glasgow to discuss the economic impacts of climate change and the green transition! And not just because it played host to the 2021 United Nations Climate Change Conference.
Glasgow is also where Adam Smith, the father of modern economics, studied and taught as a professor. Have you ever wondered what he would have thought of climate change? As a famed free-market economist, he might not be the first person you would think of. But even Adam Smith acknowledged that the invisible hand can sometimes lead to suboptimal outcomes.
Climate change is a prime example of this: market prices do not reflect the negative side effects of greenhouse gas emissions. Fortunately, it is now widely acknowledged that governments need to intervene and encourage individuals and companies to reduce their emissions.
Switching to a net-zero emissions economy is a major task. It requires changes in behaviour, innovation and significant investment to rebuild our capital stock. And this transition requires significant financing.
In my speech, I will explore what financing the transition to a greenhouse gas-neutral economy could look like. More specifically, I will focus on two key issues. First, how much investment is needed to achieve greenhouse gas neutrality, and how much of this investment is ?additional?? Second, what could the financing mix to fund this investment look like?
I know that answering these questions seems like a tough challenge???a taughy fleece tae scoor. But I will do my best to illustrate my points with clear, practical examples. Along the way, I will discuss electric cars and heating systems to help us understand the issues.
My remarks will focus on the European Union (EU), borrowing some detailed insights from Germany. Unfortunately, these data do not cover the United Kingdom (UK). But I will do my best to infer some insights for the UK as well.
2 How much needs to be invested?
Let me start with the question of how much the EU needs to invest to achieve greenhouse gas neutrality. The EU?s Fit for 55 package aims to reduce greenhouse gas emissions by at least 55 per cent by 2030. These reductions are benchmarked against 1990 emission levels. This is an intermediate step towards full greenhouse gas neutrality, for which the EU still needs to pass legislation.
From 2021 to 2030, the European Commission estimates that EU countries need to invest over ?1.2 trillion annually.[1] This amounts to nearly 8 per cent of the EU?s GDP. The private sector must take on the bulk of these investments. The investment needs are significantly more than the actual annual investment of ?760 billion in the previous decade.
The European Commission defines the difference between the investment required and the actual investment as the ?additional? investment need. This additional investment need amounts to ?480 billion, or around 3 per cent of GDP.
This definition of ?additional? investment is very useful from an accounting perspective. It gives a clear picture of how much more the EU needs to invest to meet its climate goals. However, from a financing perspective, it helps to define additional investment differently.
There are two types of investment needed to achieve greenhouse gas neutrality. The first type is investment that would not happen without the goal of reducing greenhouse gas emissions. A prime example of this type of investment is technology to capture and store carbon dioxide. This technology will play a crucial role in sectors that are difficult to decarbonise. These investments need economic resources and financing beyond what an economy spends just to maintain its capital stock.
The second type is investment where a greenhouse gas-neutral alternative replaces a fossil fuel-based technology. To illustrate this point, imagine two households buying a new car. The Jones family spend ?45,000 on a new combustion engine car. From a technical perspective, the Jones family are making a replacement investment. No additional financing is needed. Meanwhile, the Smith family decide to switch from a combustion engine car to an electric vehicle. Let us say a comparable electric car costs ?50,000. Of this amount, ?45,000 is a replacement investment. Only the remaining ?5,000 requires additional financing.
Contrast this with how the European Commission defines additional investment: They subtract the annual average value of electric cars bought in the past from the value of electric vehicles needed to meet the EU?s intermediate greenhouse gas reduction goals. Past registrations of electric vehicles fell significantly short of what is needed. Accordingly, the additional investments, as defined by the European Commission?s accounting perspective, are presumably much higher than the additional financing needs.
How great could the additional financing needs be? While we do not yet have specific figures for the EU, there are some numbers for Germany. A recent study estimates that Germany needs to invest around ?390 billion annually from 2021 to 2030 to reduce emissions by 65 per cent compared to 1990.[2] They measure this absolute sum in 2020 prices. Relative to GDP, the investment amounts to 11 per cent.
This is fairly close to the 8 per cent investment needs calculated by the European Commission for the EU.[3] However, only around 30 per cent of this investment requires additional financing. In absolute terms, this amounts to about ?120 billion.
Let me pause for a moment to summarise the two key takeaways from my remarks so far. First, the transition to greenhouse gas neutrality calls for significant investment. However, in many cases, we are replacing fossil-based technologies with greenhouse gas-neutral alternatives. Accordingly, the additional financing needs are much smaller and seem manageable.
Second, we can minimise the additional financing needs by replacing already largely depreciated capital stock. By contrast, replacing relatively new capital stock that has barely depreciated would increase the economic and financial costs. Let me illustrate this point with a brief anecdote.
On 1 January 2024, the German government introduced a new law governing heating systems. In German, it is known by the beautiful name ?Gebäudeenergiegesetz?. This law mandates that heating systems use around two-thirds renewable energy. In anticipation of this new law, many households replaced their old gas heating systems with new ones. These heating systems can run for around 25 years, so they depreciate over a long period.
Bad luck if you just installed a new gas heating system and live in the German city of Mannheim. Here, the local gas provider has said it intends to stop its services in 2035. This means that a long-term investment will become unviable when little more than half of it has depreciated: A waste of both financial and economic resources.
This anecdote highlights one key point: to avoid wasting money, we need a clear and reliable path to greenhouse gas neutrality. With a clear path mapped out, people can confidently invest in the transition.
3 What could the financing mix look like?
Now, let us explore what the potential financing mix could look like. To achieve a greenhouse gas-neutral economy, households, firms and the public sector all need to invest. They can fund these investments using both internal and external sources.
As the name would suggest, internal financing comes from within. Like the Smith family putting aside some of their income to pay for their new car. Or think of a firm that sells its products and saves some of the profits. That is internal financing, too. External financing, on the other hand, comes from outside sources such as banks or investors.
Regarding their financing mix, households, non-financial firms and the public sector differ considerably. Households tend to save significantly and mainly use bank loans as a source of external finance. The public sector, on the other hand, raises most of its funds from external sources by issuing debt securities. Only firms have a more diversified financing mix. Equity and bank loans play prominent roles here. Note that these observations hold for the EU, the UK and Germany alike.
So, what might the financing mix for the transition to a greenhouse gas-neutral economy look like? To estimate these figures, we need two key components: First, the respective shares of households, firms and the public sector in total investment. According to rough estimates by Bundesbank staff for Germany, households might have to cover about one-third of the investment, the public sector around 20 per cent, and firms just under half.[4]
Second, estimates for the future financing structure of the sectors. We assume that future financing structures will remain unchanged from today.[5] This implies that past financing structures are suitable for future climate investment. If this were not the case, perhaps due to the need for innovative financing instruments, the financing structure may differ.
What result do we get when we combine the two components? For Germany, we estimate that about 20 per cent of the financing mix could come from internal financing, primarily household savings. In terms of external financing, bank loans might play the largest role. They account for over one-quarter of the estimated financing mix. Households in particular obtain almost all their external financing from banks.
The second-largest external financing source could be debt securities, accounting for around 20 per cent. The public sector plays a prominent role here, with funding coming almost exclusively from bonds. Finally, the third-largest external financing source could be equity financing, comprising around one-sixth. Firms are the only users of this financing source, as households and the public sector do not issue equity. Different instruments, like loans from non-bank financial intermediaries, might cover the final sixth of the overall investment needs.
So, what does this mean for the EU and the UK? Can the findings for Germany be generalised? Fortunately, the financing structures of households, firms and governments are largely comparable across these regions.[6] Therefore, one of the two components in the calculations is roughly equal.
The second component???the sectoral investment needs???is less certain. I am not aware of any studies for the EU or the UK that divide the investment needs across households, firms and the public sector.[7] Without a better alternative, the findings for Germany may provide a reasonable initial estimate for both the EU and the UK.
4 Concluding remarks
Let me summarise and conclude. I have three main takeaways to share.
First, ?additional? investment needs to become greenhouse gas-neutral can also be defined from a financing perspective. In many cases, we are replacing fossil fuel-based technologies with greenhouse gas-neutral alternatives. And this requires additional financing only if greenhouse gas-neutral technologies are more expensive or if the capital stock being replaced is not yet fully depreciated. The additional financing needs are significantly smaller than the total investment required. Accordingly, I am confident that our financial system can mobilise the necessary financing.
Second, banks may play a larger role in financing the climate transition than is commonly anticipated. The main reason for this conclusion is that a substantial portion of climate investments falls on households. They need to make their homes more energy-efficient and replace fossil-fuelled heating systems with greenhouse gas-neutral alternatives. And households simply do not have many viable alternatives to bank loans.
Accordingly, a robust banking system is essential for achieving greenhouse gas neutrality. That is why we at the Bundesbank are committed to completing the European banking union. However, we also need to improve access to alternative financing sources. Non-financial firms, in particular, would greatly benefit from better capital market financing. That is why we at the Bundesbank are dedicated to creating a European capital markets union.
Third, legislators can minimise the additional financing needs by ensuring that the path to greenhouse gas neutrality is planned stringently and for the long term. Why? Because it provides incentives to avoid investments in fossil fuel technologies that may not be fully depreciated before they become non-viable.
Footnotes:
_ftn_root_1 See European Commission (2023), Investment needs assessment and funding availabilities to strengthen EU?s Net-Zero technology manufacturing capacity, SWD (2023) 68 final.
_ftn_root_2 Kemmler et al. (2024), Klimaschutzinvestitionen für die Transformation des Energiesystems, Prognos. This study is only available in German.
_ftn_root_3 One reason why Germany?s investment needs relative to GDP are higher than the EU?s is that Germany intends to achieve greenhouse gas neutrality sooner (in 2045 rather than 2050).
_ftn_root_4 The estimates are based on the public sector shares provided in Brand and Römer (2022), Öffentliche Investitionsbedarfe zur Erreichung der Klimaneutralität in Deutschland, KfW Research???Fokus Volkswirtschaft, Nr. 395 and various plausibility assumptions. The analysis assumes that the public sector?s involvement in industry and the residential investment sector is minimal or non-existent. This is because the analysis looks at financing flows before any government support, such as subsidies.
_ftn_root_5 More precisely, the financing structure is derived from the average internal and external financing flows over the period 2018 to 2022. This averaging smooths out short-term fluctuations and centres on the reference year of 2020 used in the Kemmler et al (2024) study. Internal financing enters the calculation on a net basis, assuming that the depreciation inflows finance the replacement investments.
_ftn_root_6 In the EU and UK, households rely slightly less on bank loans than in Germany, but the share is still high. In the public sector, Germany has a significantly higher share of debt security financing, particularly compared to the EU. In the UK, non-financial firms have a significantly lower share of equity financing and a higher share of (bank) loans compared to Germany. In contrast, in the EU, non-financial firms have a slightly higher share of equity financing and a smaller share of (bank) loans compared to Germany. All figures are based on average financial flows from 2018 to 2022.
_ftn_root_7 European Commission, op. cit., estimates that, in the EU, the public sector could account for 17 to 20 per cent of total investment. However, it does not clarify how this investment will be split between households and firms. For the UK, HM Government (2023), Mobilising Green Investment???2023 Green Finance Strategy, mentions that most investment must come from the private sector. However, it likewise does not provide any details on how this investment will be split between households and firms.
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Envisioning Tomorrow: The Role of CBDCs in Europe's Digital Financial Ecosystem | Frankfurt Digital Finance Conference
1 Introduction
Good morning ladies and gentlemen and thank you very much for your warm welcome.
I am honoured to have been invited back to this year?s Frankfurt Digital Finance Conference in this wonderful building here in Frankfurt?s Palmengarten and to have been asked to hold a keynote to kick off today?s event.
Allow me to begin my keynote this morning with a quote attributed to Oscar Wilde: The future belongs to those who recognise opportunities before they become obvious. These words, ladies and gentlemen, could not be any better suited to our financial ecosystem.
And it is precisely opportunities that I wish to address in my keynote today ? the opportunities provided by central bank digital currencies, or CBDCs for short. A subject that is as timely as it is significant.
2 The future is digital
We are at the cusp of a new era. One in which the digitalisation of the financial sector is not just an option but a necessity. New technologies are venturing into the realm of payments and new forms of money, such as digital central bank currencies and stablecoins, are also emerging as alternatives to physical cash.
These developments all pose new challenges for central banks. Ultimately, central banks must continue to ensure secure and efficient payments in line with their mandate and redefine their role in an increasingly digitalised world in order to maintain the public's trust in our monetary system.
The question that we therefore now face is: how do we respond to these technological challenges?
And that is precisely why we in the Eurosystem ? by that I mean the European Central Bank and the national central banks of the euro-area member states, including the Bundesbank ? are taking a proactive approach to actively help shape the future of Europe?s digital financial ecosystem.
3 What are we aiming to achieve with the introduction of a digital euro?
One could argue that the Eurosystem already offers enough sufficiently well-functioning products, be it physical banknotes and coins or cashless payment instruments. After all, these have proven their worth for decades. Yet at the same time, we cannot simply ignore the evolving world around us. In an increasingly digitalised society, we must adapt to the changing needs and demands of consumers and rethink our payment services.
Let me outline the three key motivations behind the possible introduction of a retail CBDC in Europe ? a digital euro, which we sometimes like to summarise as resilience, autonomy and efficiency.
Let me first start with resilience. The foundation of an independent and efficient monetary policy is the adoption and use of the euro. By providing our common currency???the euro???in its form as legal tender and as a modern ?all-in-one? digital payment solution, we are paving the way for our currency to enter the digital age, making it ?future-proof? and fit for purpose in an increasingly digital society.
The digital euro would thereby help to preserve the euro?s fulfilment of the core monetary functions and shield the euro area from competing foreign currencies as well as foreign???and potentially unregulated???stablecoins by safeguarding the anchor function of central bank money.
Second, the digital euro is necessary to improve the autonomy of the European payment system. In its current form, the European payments landscape is highly dependent on non-European providers. Almost 25 years after the introduction of the euro, we still do not have a digital payment solution that can be used across the entire euro area and that runs on a European infrastructure, which, in my view, is not compatible with the concept of a single European market. Although a small number of successful payment innovations have emerged across the euro area over the past years, such as iDEAL in the Netherlands or BIZUM in Spain, the reach of these payment solutions usually ends at national borders.
As a result, payments in Europe are largely dependent on international schemes, primarily those in the United States. At present, just under two thirds of all card payments in the euro area are processed by non-European providers. And I believe that Europe?s dependencies in the digital age are likely to increase if we do not fundamentally take matters into our own hands.
Third, is the issue of efficiency. By creating a pan-European payment rail in a technically modern form, we would foster competition and innovation in payments across Europe, which we believe is the best path towards efficiency in payments. The payment initiatives we have today, such as BIZUM or WERO, would be able to integrate the digital euro into their payment applications, thereby enabling them to gain instant European reach.
4 What would a digital euro be for the common citizen?
Although the issues I have just touched upon are very important, they are not necessarily of primarily relevance for the daily life of a majority of citizens in Europe. Hence, what would the digital euro be from the perspective of the customer?
I believe that the digital euro would not just be a commitment to Europe?s autonomy, increase the resilience of our payment system and foster competition and innovation, it would also improve payments and make life easier for the 350 million residents of the euro area.
The digital euro would serve as an additional means of payment alongside cash. As a digital upgrade of banknotes and coins, it would be an ?all-in-one payments solution?, as we like to call it, which means it can be used in almost all everyday payment situations, including at retail checkouts, transactions among family and friends, online purchases, and payments to or from public authorities. Furthermore, it would be the first digital currency which could be used both online and offline. That is to say, also in the event of a loss of internet reception.
Moreover, the design of the digital euro would ensure that it would offer the highest possible level of user privacy, comparable only to cash. No other digital means of payment in Europe currently offers all these features.
Despite the many benefits the digital euro would bring for Europe as a whole, we must, nevertheless, proceed with caution. The introduction of a digital euro raises important questions about privacy, security, and the impact on financial stability and monetary policy. We must ensure that the digital euro upholds the highest standards of data protection, that it is resilient against cyber threats, and that it does not have a negative impact on financial stability.
5 Wholesale CBDC
Digitalisation raises questions not only in terms of how we intend to continue providing access to central bank money for our European citizens in future, but also in terms of how we intend to supply money to our wholesale customers. It is and will remain essential that we are able to settle digital transactions using new and innovative technologies, such as distributed ledger technology (DLT) in central bank money. An entire ecosystem is currently evolving around the tokenisation of securities, which involves all parts of the financial system.
Like other financial players, the Bundesbank, and also the Eurosystem as a whole, see the significant benefits that the use of these new technologies can bring. The advantages of DLT, such as automated settlement by means of smart contracts and reduced reconciliation needs, are clear.
But to fully harness this potential, we also need an innovative settlement mechanism for the cash leg???one which settles transactions in central bank money. We are therefore working on developing wholesale solutions that enable banks to settle DLT-based financial market transactions in central bank money.
The Eurosystem recently completed an exploration phase together with the market, which ran from May to November 2024, during which we tested various new technologies for wholesale central bank money settlement using real transactions. The Bundesbank also participated in this exploration phase with its ?Trigger solution?, which builds a bridge between DLT platforms and the conventional TARGET payment system. The feedback we have received from the market so far has been very positive. I think we can already say that the exploration phase was a complete success.
The anticipated benefits of DLT are seen as having the potential to address and overcome the ecosystem's current shortcomings, such as fragmentation, complexity, over-intermediation, and technological inefficiencies, which hinder the growth of a digital capital markets union.
By developing a new ecosystem from the ground up, it could be made more integrated and harmonised, featuring a ?common set of rails????a shared ledger or a network of fully interoperable ledgers???that would guarantee reachability, open access, and compatibility across the services of all participants.
Our primary focus is now on implementing a short-term wholesale solution to meet the immediate and growing demands of the market. This will buy us some much-needed time to continue working on a vision for a long-term solution for wholesale CBDC. A solution which must ultimately go hand in hand with the evolving financial market ecosystem.
6 Business-to-business (B2B) payments
Alongside its work into the possible introduction of a digital euro and the exploration of wholesale CBDC, the ECB, together with the Eurosystem, has also been turning its focus to another area of payments???one which is increasingly gaining traction: business-to-business payments, or B2B payments for short.
To fully leverage the potential of the evolving payments landscape in the area of CBDCs, last October the ECB organised a special focus workshop on innovations in B2B payments and the role central bank money could play.
This workshop provided a one-of-a-kind platform to learn more about the potential use cases out there in the market. Given the high level of interest shown in the first focus workshop, I?m sure this will not be the last one of its kind.
7 Outlook
Ladies and gentlemen,
The introduction of the digital euro and the exploration of wholesale CBDC and B2B use cases are not just a technical exercise, but a clear commitment to the innovative strength and competitiveness of Europe.
The Bundesbank and the Eurosystem are determined to play an active role in shaping this digital transformation.
It is, however, crucial that we continue working together and pool our resources and expertise in order to fully exploit the opportunities offered by digitalisation to create a strong, stable and future-proof digital financial ecosystem for Europe.
Thank you for your attention.
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Ankündigung Tenderverfahren ? Aufstockung 10-jährige Bundesanleihe
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Announcement of auction ? Reopening 10-year Federal bond
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r* in the monetary policy universe: navigational star or dark matter? | Lecture at the London School of Economics and Political Science
1 Introduction
Ladies and gentlemen, It?s a pleasure and an honour for me to speak here before such a distinguished audience.
Remember to look up at the stars and not down at your feet. This was advice from Stephen Hawking, the famous English physicist and author of numerous books on the cosmos. And who would want to contradict the genius?
So today I invite you to join me on a stargazing tour. If you don?t have a telescope with you, no worries. However, I should add a disclaimer here: When a couple look up at the stars, things could get romantic. When astronomers observe the stars, impressive images can come into view. When economists talk about stars, it usually gets complicated. Now you know what you?re getting into!
I?m sure you?ve already guessed what topic I have in mind: the natural rate of interest???also known as r-star. It is a concept that economists have been grappling with for more than 125 years.[1] And it has perhaps never received more attention than in the current era of monetary policy.
From a central banker?s perspective, I would like to discuss what role r-star can and should play in the monetary policy universe. I will structure my lecture around four key questions: What is r-star and why is it of interest for monetary policy? How have estimates for r-star evolved over the past decades? What drives uncertainty about current estimates and the future evolution of r-star? What conclusions should monetary policy draw from this?
2 Definition of r-star and use for monetary policy
Let?s start with the definition. The natural rate is the real interest rate that would prevail if the economy were operating at its potential and prices were stable. R-star is commonly thought to be driven by real forces that structurally affect the balance between saving and investment. Think of technological progress and demographics, for example. This also means that r-star should, by definition, be independent of monetary policy. The latter follows from the widely held belief that monetary policy can affect real variables only temporarily, but is neutral in the long term.
At first glance, the natural rate could be a guiding star for the conduct of monetary policy. If a central bank sets its policy rates so that the real interest rate is above r-star, monetary policy is restrictive or ?tight?. Consequently, economic activity slows and the inflation rate should decrease. If the real rate is below r-star, monetary policy is expansionary or ?loose?. It provides incentives for consumers to purchase more and for enterprises to step up investment and output. Hence, this should result in more economic activity and a higher inflation rate.
However, the idea of the natural rate serving as a guiding star for monetary policy comes with profound challenges. Perhaps the name r-star evokes associations with astronomy and navigation. But these would be misleading. If r-star were like a star in the sky, it would be relatively easy to locate. Stars emit light and are therefore observable.
The natural rate is a theoretical concept. It is based on a hypothetical state of the world. That means the natural rate is, by nature, unobservable. It can only be estimated. For example, models use assumptions about the relationship between measurable variables and r-star. In this respect, the natural rate is not so much like a star shining brightly in the sky. It is more a case of dark matter. As it is invisible, astronomers infer dark matter indirectly by observing its gravitational effects.
If something is hard to find, it only spurs researchers to look even harder???whether they are astronomers or economists. Therefore, we can draw on a variety of estimation methods for the evolution of the natural rate.
3 Estimates for r-star over time
Since around the 1980s various estimates of different types have been pointing to a downward trend for r-star over several decades and across many advanced economies.[2] In the wake of the global financial crisis, the estimates slumped to exceptionally low levels.[3] This development was roughly in line with the observed trajectory of actual real interest rates of short- and long-term government bonds during this period. And no wonder: In the long run, both should be driven by the same fundamental forces affecting the balance between saving and investment.
So the question is this: what has lifted saving and depressed investment? A simple answer would be: in the long term, the most important driver is potential growth. But this finding is not very enlightening. Potential growth is also not observable. It is determined by underlying forces such as demographics and technological progress. This is where we need to look for the causes.
Indeed, according to a number of recent studies, waning productivity growth and population ageing were the key factors in pushing saving up and investment down.[4] Lower productivity reduces the return on investment, so people are less willing to invest. As they expect to live longer, they are more willing to save.
In addition, inequality, risk aversion and fiscal policy could be other factors. For example, growing inequality raises saving, as richer households save a larger share of their income. Similarly, higher risk aversion leads to higher saving, especially in safe assets, while lowering investment.[5]
Many of the estimates for r-star reached their lowest point in the pandemic years 2020 and 2021. After that, there were signs of a partial reversal. A recent analysis by Eurosystem economists across a suite of models and data up to the end of 2024 suggests that estimates of r-star range from ??½?% to ½?% in real terms. In nominal terms, they find that it ranges between 1¾?% and 2¼?%.[6]
It is clear that these ranges depend on the estimating approaches considered. Taking into account an even wider array of measures, Bundesbank staff calculations using data up to the end of 2024 reveal a range of 1.8?% to 2.5?%.[7] And the ECB found for the third quarter of 2024: When three estimates derived from versions of the Holston-Laubach-Williams model are factored in, the range of real r-star is ??½?% to 1?% and the nominal range is 1¾?% to 3?%.
All in all, the results suggest that the range of r-star estimates most likely increased by about one percentage point from their lows. The latest estimates by economists from the Bank for International Settlements come to similar findings.[8]
The reasons for the increase after the pandemic are not yet fully clear. For example, high fiscal spending with rising public debt levels could play a role. Or higher needs for capital, as companies make their value chains more resilient by duplicating structures and increasing stock levels.
4 Uncertainties around r-star estimates
Stargazing tours in economics are a journey into the uncertain. This is also and especially true for r-star. Estimates of the natural rate of interest are subject to major uncertainties, shaped by three M?s: megatrends, methodology and monetary policy.
First, we are facing a number of megatrends. Think of climate change, ageing societies, digitalisation, and the risks of de-globalisation and increasing geopolitical divisions. The effects of these megatrends on natural rates are difficult to gauge and may change over time.
On the one hand, they could contribute to a higher natural rate. Here are some examples: The widespread uptake of artificial intelligence could boost productivity growth. The green transition could lead to higher investment. Fiscal deficits could persist at an elevated level due to higher defence spending given geopolitical tensions. The entry of the baby boomer generation into retirement could reduce savings.
On the other hand, life expectancy is predicted to keep rising; the high hopes for the productivity-enhancing effect of AI could turn out to be too optimistic; and given high public debt levels, fiscal space for additional spending is limited in many countries. Overall, it is virtually impossible to predict which developments will prevail in affecting r-star.
The second factor of uncertainty is methodology. The methods used to define and estimate r-star differ in important ways, especially in terms of time and risk.
Ricardo Reis demonstrates this impressively in a recent paper.[9] He presents four different ?r-stars?. They are based on four different conceptual approaches. And they developed quite differently between 1995 and 2019.
One major difference is the risk dimension. Knut Wicksell?s original definition of the natural rate was the rate of return on physical capital in equilibrium.[10] The rate of return on physical capital is the return on investment in the real economy. And this rate is very much associated with risks.
However, this perspective has been lost in virtually all of the model approaches. Generally, they use rather secure government bond yields as a starting point. Again, with regard to the real economy, a risky return on capital would be a more appropriate yardstick. When we look at measures for the return on private capital, we see a strong contrast with risk-free rates. Returns on private capital have remained broadly stable over the last decades in the US,[11] Germany[12] and the euro area as a whole.[13]
From these observations, Ricardo Reis draws the following conclusion: focusing exclusively on the return on government bonds as the measure of r-star, while neglecting the return on private capital, leads to the wrong policy advice.[14]
Another case in point is the time horizon that is considered. Commonly cited estimates seek to assess the real rate that prevails in the longer run, when all shocks have dissipated. Most of these estimates are highly imprecise. Many methods simply project the current or the historical level of real rates into the future. This may confound permanent trends with cyclical factors, which may not be representative for the future. As a result, such methods could miss important turning points in real rate trends.
Other approaches characterise a short-run real rate in a hypothetical world without frictions. While interesting, this concept is of limited value for actual policymaking in the real world. Methods based on a short-term equilibrium tend to produce more volatile estimates of r-star.
There is a third reason for caution: monetary policy itself may play a role in shaping the natural rate or its estimates. A number of studies challenge the view that money is neutral in the long run.[15]
There are different channels through which monetary policy could have lasting effects on real interest rates. Prolonged tight monetary policy, for example, may lower investment, innovation and productivity growth.[16] By contrast, persistent monetary easing could fuel financial imbalances and contribute to zombification.[17]
Moreover, recent research suggests that central bank announcements provide guidance about the trend in real rates. For instance, a narrow window around Fed meetings captures most of the trend decline in US real long-term yields since 1980.[18] This could mean: when central banks look for r-star in financial market prices, they might actually be looking in a mirror.[19] Feedback loops between monetary policy and markets could unduly reinforce their perceptions about r-star. And shifts in perceived r-star could affect actual r-star as it influences saving and investment decisions.
5 Conclusions for monetary policy
Against the backdrop of these major uncertainties, the final key question of my speech is this: what role can and should r-star play for monetary policy in practice?
Let?s approach the answer with a thought experiment: Put yourself in the shoes of a monetary policymaker who only looks at r-star. The relevant interest rate with which you steer the monetary policy stance is currently 2.75?%. After a previous series of interest rate cuts, you consider whether a further cut would be appropriate.
Your staff inform you that various point estimates of r-star range from around 1.8?% to 2.5?% in nominal terms. If r-star were at the upper end of the estimates, the policy rate would become neutral with the next rate cut. Things would be different if r-star were at the lower end of the estimates: Monetary policy would continue to be restrictive, even after several further rate cuts.
So how would you proceed, given a certain stance you want to achieve? Beware: If you rely on a wrong estimate, your decision may have a different effect on inflation than you intended. Simply choosing the middle of the range might not be a happy medium. Around the point estimates, there are often uncertainty bands of different sizes and with asymmetries.
As you have probably guessed: It is no coincidence that I have described this particular decision-making situation. It looks similar in the euro area ahead of the next monetary policy meeting of the ECB Governing Council at the beginning of March. After several rate cuts, the neutral rate could already be near???or there may still be some way to go.
The President of the New York Fed, John Williams, put the problem in a nutshell when he said: as we have gotten closer to the range of estimates of neutral, what appeared to be a bright point of light is really a fuzzy blur.[20]
The bottom line here is this: The closer we get to the neutral rate, the more appropriate it becomes to take a gradual approach. For this purpose, r-star is a helpful concept: it indicates when we need to be more cautious with policy rate moves so that we don?t take a wrong step.
At the same time, the limits of the concept are also clear: it would be risky to base decisions mainly on r-star estimates. Much more is needed to assess the current monetary policy stance and the optimal policy path for the near future.
That is why the Eurosystem uses a variety of financial, real economic and other indicators along the monetary policy transmission mechanism. We want the fullest picture possible. And, of course, r-star also has a place in this picture. For instance, r-star is included in model-based optimal policy projections that we use in the decision-making process.
In my opinion, proceeding in a data-driven and gradual manner has served the ECB Governing Council well. There is no reason to act hastily in the present uncertain environment. The data will tell us where we need to go.
Away from day-to-day monetary policymaking, the concept of the natural rate of interest provides a useful framework. This is also exemplified in the policy scenarios that Ricardo Reis presented last week in Brussels.[21]
He works with the assumption that government bond rates remain around current levels. I would add the assumption that inflation stays on target???actually, that is what I am in office for and committed to. Assuming output is at capacity, policy rates would be persistently higher than in the past. But the recommendations on actual monetary policy depend on the driving forces: is the new setting caused by less demand for safe and liquid assets or by an increase in productivity? And he has two more scenarios in his paper!
That provides a good example of why we should take a close look at the factors behind r-star estimates. Here it is important to even better understand the forces that are shifting real interest rate trends. We need to find out how these forces and trends affect our work to ensure price stability.
Reviewing our monetary policy strategy from time to time is therefore vital. That is precisely what we are doing right now in the Eurosystem. And, of course, in this process, we look at all the questions I mentioned about r-star.
Our stargazing tour is drawing to a close. It turns out we were dealing more with dark matter than with a shining star. Just as dark matter is an exciting field for astronomers, r-star is a rewarding topic for economists.
Using r-star alone to navigate the monetary policy universe could be like flying almost blind. But having it as one of many instruments in your cockpit is highly useful.
I would like to end by quoting Stephen Hawking again: Mankind?s greatest achievements have come about by talking, and its greatest failures by not talking.
Footnotes:
_ftn_root_1 Wicksell, K. (1898), Geldzins und Güterpreise: eine Studie über die den Tauschwert des Geldes bestimmenden Ursachen, Jena, G. Fischer (English version as ibid. (1936), Interest and prices: a study of the causes regulating the value of money, London, Macmillan).
_ftn_root_2 Obstfeld, M., Natural and Neutral Real Interest Rates: Past and Future, NBER Working Paper, No 31949, December 2023.
_ftn_root_3 Brand, C., M. Bielecki and A. Penalver (2018), The natural rate of interest: estimates, drivers, and challenges to monetary policy, ECB Occasional Paper, No 217.
_ftn_root_4 Cesa-Bianchi, A., R. Harrison and R. Sajedi (2023), Global R*, CEPR Discussion Paper No 18518; Davis, J., C. Fuenzalida, L. Huetsch, B. Mills and A. M. Taylor (2024), Global natural rates in the long run: Postwar macro trends and the market-implied r* in 10 advanced economies, Journal of International Economics, Vol. 149; International Monetary Fund (2023), The natural rate of interest: drivers and implications for policy, World Economic Outlook, April, Chapter 2.
_ftn_root_5 On the development of risk appetite in financial markets, see Deutsche Bundesbank, Risk appetite in financial markets and monetary policy, Monthly Report, January 2025.
_ftn_root_6 Brand, C., N. Lisack and F. Mazelis (2025), Natural rate estimates for the euro area: insights, uncertainties and shortcomings, ECB Economic Bulletin, 1/2025.
_ftn_root_7 Additional models would also provide values outside this range, but are currently not deemed sufficiently robust.
_ftn_root_8 Benigno, G., B. Hofmann, G. Nuño and D. Sandri (2024), Quo vadis, r*? The natural rate of interest after the pandemic, BIS Quarterly Review, March.
_ftn_root_9 Reis, R. (2025), The Four R-stars: From Interest Rates to Inflation and Back, draft working paper.
_ftn_root_10 Wicksell, K. (1898), op. cit.
_ftn_root_11 Caballero, R., E. Farhi and P.-O. Gourinchas (2017), Rents, Technical Change, and Risk Premia Accounting for Secular Trends in Interest Rates, Returns on Capital, Earning Yields, and Factor Shares, American Economic Review: Papers & Proceedings 107(5), pp. 614?620.
_ftn_root_12 Deutsche Bundesbank, The natural rate of interest, Monthly Report, October 2017.
_ftn_root_13 Brand, C., M. Bielecki and A. Penalver (2018), The natural rate of interest: estimates, drivers, and challenges to monetary policy, ECB Occasional Paper, No 217.
_ftn_root_14 Reis, R., Which r-star, public bonds or private investment? Measurement and policy implications, Unpublished manuscript, September 2022.
_ftn_root_15 Jordà, Ò., S. Singh and A. Taylor, The long-run effects of monetary policy, NBER Working Papers, No 26666, January 2020, revised September 2024; Benigno, G., B. Hofmann, G. Nuño and D. Sandri (2024), Quo vadis, r*? The natural rate of interest after the pandemic, BIS Quarterly Review, March.
_ftn_root_16 Baqaee, D., E. Farhi and K. Sangani, The supply-side effects of monetary policy, NBER Working Paper, No 28345, January 2021, revised March 2023; Ma, Y. and K. Zimmermann, Monetary Policy and Innovation, NBER Working Paper, No 31698, September 2023.
_ftn_root_17 Borio, C., P. Disyatat, M. Juselius and P. Rungcharoenkitkul (2022), Why so low for so long? A long-term view of real interest rates, International Journal of Central Banking, Vol. 18, No 3.
_ftn_root_18 Hillenbrand, S. (2025), The Fed and the Secular Decline in Interest Rates, The Review of Financial Studies, forthcoming.
_ftn_root_19 Williams, J. C. (2017), Comment on ?Safety, Liquidity, and the Natural Rate of Interest?, by M. Del Negro, M. P. Giannoni, D. Giannone, and A. Tambalotti, Brookings Papers on Economic Activity, Vol. 1, pp. 235?316; Rungcharoenkitkul, P. and F. Winkler, The natural rate of interest through a hall of mirrors, BIS Working Paper No 974, November 2021.
_ftn_root_20 Williams, J. C., Remarks at the 42nd Annual Central Banking Seminar, Federal Reserve Bank of New York, New York City, 1 October 2018.
_ftn_root_21 Reis, R. (2025), op. cit.
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Nettotilgungen am deutschen Rentenmarkt im Dezember 2024
Am deutschen Rentenmarkt war die Emissionstätigkeit im Dezember 2024 ? wie häufig zum Ende eines Jahres ? schwächer als im Vormonat. Insgesamt wurden inländische Schuldverschreibungen für 81,5 Mrd ? emittiert, verglichen mit 108,2 Mrd ? im November. Nach Abzug der gegenüber dem Vormonat höheren Tilgungen und unter Berücksichtigung der Eigenbestandsveränderungen der Emittenten verringerte sich der Umlauf heimischer Rentenwerte um 7,0 Mrd ?. Daneben sank der Umlauf ausländischer Schuldverschreibungen in Deutschland im Dezember um 0,6 Mrd ?, sodass im Ergebnis 7,6 Mrd ? an die Anleger zurückflossen.
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