BERLIN: Inflation is a risk for financial stability and central banks must take this into consideration, German Finance Minister Christian Lindner said on Monday.

"Inflation is a tough beast," said Lindner at an event of the association of German banks, adding that inflation is a risk not only for the financial system, but also for the economy.

"Fiscal policy should not contradict monetary policy," the finance minister said, asking for a consolidation of public finances.

German inflation holds steady in February at 8.7 percent

Subsidies are not the solution to current problems, according to Lindner - "we should focus on structural reforms to promote growth," he said.

Lindner added there are no reasons to worry about financial stability in Germany following the banking turmoil in the U.S. and with Credit Suisse.

"There isn't a banking crisis," he said. "Our banks have a strong capital basis."