Ms Schnabel, the global economy is only slowly recovering from one of the most severe economic crises in living memory, but the mood on stock markets is better than ever. Do you find that a cause for concern?

We are closely monitoring this. Developments in Europe have not been extreme up to now, but there are signs of excesses here too, for example in the real estate market. In the United States, the cyclically adjusted price/earnings ratio is now higher than it was before the financial crisis of 2008.

Have equity and real estate prices reached such heights again that they are bound to implode at some point?

High share valuations in the euro area are still justified by higher earnings expectations. But the risks of a correction are increasing, especially if the economic recovery falls short of expectations.

The collapse of the US hedge fund Archegos has just generated multi-billion losses for large banks such as Credit Suisse and Nomura. How can a single fund rock such financial giants?

That is indeed a remarkable incident. It shows that there are considerable gaps in the regulation of funds. Archegos is a family office, which manages the capital of a single person. No other investors held any equity, which is why the requirements and reporting obligations were less stringent. The fund was thus able to increase its leverage substantially without it being noticed.

But it’s even more astounding that tightly regulated banks could assume so much risk. Credit Suisse has burnt through a whole year of profits, only at the last minute did Deutsche Bank manage to sell equity stakes that Archegos had posted as collateral for loans – although it actually doesn’t want to conduct such transactions with hedge funds any longer.

There is a need to scrutinise the reasons why the banks enabled the fund to leverage up to such an extent. That could have resulted in further contagion effects.

The institutions thought that their loans were collateralised by the equity stakes held by Archegos. But as the fund was forced to sell these stakes quickly and the prices were plummeting, the collateral was no longer worth much.

Such fire sales are dangerous, as we saw during the global financial crisis. We can be glad that the effect has been limited to just a few players. Otherwise, this incident might even have morphed into a systemic crisis.

That sounds as if the financial sector’s avoidance of more serious consequences was more down to luck than good judgement. Is there a lack of regulation?

It is thanks to regulation that the banks have sufficient capital to cushion losses of that nature. But more is to be done when it comes to funds, because their regulation is predominantly geared towards protecting investors. Fortunately, it has only been a single fund up to now. Nonetheless, it is a warning signal that there are considerable systemic risks that need to be better regulated.

One of the oddities on the financial market is the bitcoin hype. The price of the cryptocurrency has multiplied, firms such as Tesla want to accept bitcoins as a means of payment, there is talk of PayPal customers being able to pay with bitcoins. Are you worried about the prospect of a new, hitherto unregulated currency emerging alongside the euro, dollar and the like?

In our view it is wrong to describe bitcoin as a currency, because it does not fulfil the basic properties of money. It is a speculative asset without any recognisable fundamental value and is subject to massive price swings.

Elon Musk would beg to differ.

He is at liberty to do so.

Currencies such as the euro don’t have any intrinsic value either, but are simply based on trust.

The euro is backed by the ECB, which is highly trusted. And it is legal tender. Nobody can refuse to accept euro. Bitcoin is a different matter.

The fact remains that many people evidently trust bitcoin. Could that harm established currencies like the euro?

My concern is more that trust in cryptocurrencies might rapidly evaporate, causing disruption in financial markets. That is a very fragile system.

The ECB is planning to introduce a digital euro itself. Why is that?

Payment systems today are far more digitalised than they used to be. That is why we need to examine what that means for our monetary system. But nothing has been decided yet. A great deal of preparatory work needs to be done to enable the project to be properly set up.

That would mean that the digital euro would only be introduced in four or five years’ time. Is that not too late?

I don’t think so. Nobody can offer a similar degree of security and data protection as the ECB. People find that topic important: as consumers, to whom do we want to disclose our data? They are surely more likely to trust the ECB than Facebook or other private operators.