This report examines how income groups and forms of employment in Germany have changed in the past two decades. Since the mid-1990s, inequality in disposable household income in Germany has generally increased. This trend was in effect until 2005. While fewer people had disposable incomes in the ... more

Mr. Krause, you took a close look at income groups in Germany. What did you hope to accomplish? Peter Krause: We wanted to bring together two discussion threads in our study. One thread has to do with the long-term trend in inequality of household income distribution and the other, with changes in ... more

Although banks are required to document their equity capital for loans, corporate bonds, and other receivables, they are currently exempted from the procedure when investing in government bonds: they enjoy an “equity capital privilege.” As part of the Basel III regulatory framework ... more

Mrs. Schäfer, the Basel Committee on Banking Supervision has been negotiating the Basel III reform package since 2013. Banks have long been able to finance EU government bonds with 100% third-party debt capital. Is there agreement with regard to increasing the capital requirement for them? The ... more

One focus of the G20 Summit in Hamburg in July 2017 was the United Nations’ sustainable development goals, including those set for the water sector. Despite progress, around 800 million people worldwide do not have adequate access to drinking water. Increasing block tariffs are an instrument ... more

• Current Economic Bulletin 27/2017
• To Table of Contents

This report examines how income groups and forms of employment in Germany have changed in the past two decades. Since the mid-1990s, inequality in disposable household income in Germany has generally increased. This trend was in effect until 2005. While fewer people had disposable incomes in the median range, the proportion of the population at both tails of the income distribution increased. At the same time, there were many changes in the labor market. Employment rose, working hours became increasingly differentiated, and starting in 2005, the unemployment rate fell. While the employment increase was spread across almost all income groups, it was reflected differently in each group. The proportion of people with low wages in the income groups below the median rose steadily during the two decades studied. At the same time, in 2014–15 more people in high income groups had regular types of employment than they did in the second half of the 1990s. In the groups in the median range, regular types of employment were recently as frequent as they were 20 years ago and unemployment also declined here. Further, in these groups the proportion of those with jobs paying low wages is higher.

Although banks are required to document their equity capital for loans, corporate bonds, and other receivables, they are currently exempted from the procedure when investing in government bonds: they enjoy an “equity capital privilege.” As part of the Basel III regulatory framework redraft, the privilege may be eliminated in order to disentangle the default risks between sovereigns and banks. The present study examines how much additional equity capital the banks of the euro area’s major nations would require if the equity capital privilege were eliminated. At nine billion euros, the estimates show the highest capital requirement for Italian banks. In comparison, French banks would only require additional capital of three billion euros and German banks would need just under two billion euros. Since eliminating the equity capital privilege would make the Italian state’s consolidation efforts more difficult, it is advisable to risk weight newly purchased government bonds only or allow for long transition phases.