Banking in Germany is a highly leveraged industry, as its average leverage ratio (assets divided by net worth) as of 11 October 2008 is 52 to 1 (while, in comparison, that of

France France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of Overseas France, overseas regions and territories in the Americas and the Atlantic Ocean, Atlantic, Pacific Ocean, Pac ...

is 28 to 1 and

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and ...

is 24 to 1); its short-term liabilities are equal to 60% of the German GDP or 167% of its national debt.

History

From the 15th century, banking families such as

Fugger The House of Fugger () is a German upper bourgeois family that was historically a prominent group of European bankers, members of the fifteenth- and sixteenth-century mercantile patriciate of Augsburg, international mercantile bankers, and ven ...

Welser Welser was a German banking and merchant family, originally a patrician family based in Augsburg and Nuremberg, that rose to great prominence in international high finance in the 16th century as bankers to the Habsburgs and financiers of C ...

and Hochstetter were international mercantile bankers and venture capitalists. The oldest bank still in existence in Germany,

Berenberg Bank Joh. Berenberg, Gossler & Co. KG, commonly known as Berenberg Bank and also branded as simply Berenberg, is a multinational full-service investment bank based in Hamburg, Germany. It was founded by the Flemish Berenberg family in 1590 () ...

, was founded by Dutch brothers Hans and Paul Berenberg in 1590, is still owned by the

Berenberg family The Berenberg family ( Dutch for "bear mountain") was a Flemish-origined Hanseatic family of merchants, bankers and senators in Hamburg, with branches in London, Livorno and other European cities. The family was descended from the brothers ...

, and is the world's oldest or second oldest bank, depending on the exact definition.

Market overview

Germany has

universal banking A universal bank participates in many kinds of banking activities and is both a commercial bank and an investment bank as well as providing other financial services such as insurance.private bank Private banks are banks owned by either the individual or a general Partner (business rank), partner(s) with limited partner(s). Private banks are not incorporation (business), incorporated. In any such case, creditors can look to both the "enti ...

s (including

direct bank A direct bank (sometimes called a branch-less bank or virtual bank) is a bank that offers its services only via the Internet, email, and other electronic means, often including telephone, online chat, and mobile check deposit. A direct bank has no ...

s): *the largest ones are

Deutsche Bank Deutsche Bank AG (), sometimes referred to simply as Deutsche, is a German multinational investment bank and financial services company headquartered in Frankfurt, Germany, and dual-listed on the Frankfurt Stock Exchange and the New York St ...

Postbank Postbank or Post bank may refer to: Postal savings systems (alphabetical by country) * Bulgarian Postbank, a Bulgarian retail bank * Chunghwa Post, a Taiwanese postal service that provides savings account services * Deutsche Postbank, a German re ...

(acquired by Deutsche Bank), Unicredit Bank AG (HypoVereinsbank),

Commerzbank Commerzbank AG () is a major German bank operating as a universal bank, headquartered in Frankfurt am Main. In the 2019 financial year, the bank was the second largest in Germany by the total value of its balance sheet. Founded in 1870 in Hambur ...

and

Dresdner Bank Dresdner Bank AG was a German bank and was based in Frankfurt. It was one of Germany's largest banking corporations and was acquired by competitor Commerzbank in May 2009. History 19th century The Dresdner Bank was established on 12 Novembe ...

(which was acquired by Commerzbank in 2008) – they cooperate together as the

Cash Group Cash Group is a cooperation of the four largest German private banks (Deutsche Bank, Commerzbank, HypoVereinsbank, and Postbank) and their subsidiaries, in which they mutually waive ATM usage fees for their customers. It is not an interbank netw ...

(B) cooperative banks: *'' Volksbanken und Raiffeisenbanken'', '' Sparda-Bank'',

DZ Bank DZ Bank AG () is the second largest bank in Germany by asset size and the central institution for around 800 cooperative banks and their around 8,500 branch offices. Within the German Cooperative Financial Group, which is one of Germany's la ...

, see

German Cooperative Financial Group The German Cooperative Financial Group, german: Genossenschaftliche FinanzGruppe Volksbanken Raiffeisenbanken, sometimes referred to in English as "Volksbanken Raiffeisenbanken Cooperative Financial Network", is a major cooperative banking networ ...

savings bank A savings bank is a financial institution whose primary purpose is accepting savings deposits and paying interest on those deposits. They originated in Europe during the 18th century with the aim of providing access to savings products to al ...

s: * Sparkassen and

Landesbank In German-speaking jurisdictions, ''Landesbank'' (plural ), , generally refers to a bank operating within a territorial subdivision () that has autonomy but not full sovereignty. It is occasionally translated as "provincial bank". Austria-Hungar ...

en, see

Sparkassen-Finanzgruppe The ''Sparkassen-Finanzgruppe'' ("Savings Banks Financial Group") is a network of public banks that together form the largest financial services group in Germany and in all of Europe. Its name refers to local government-controlled savings banks ...

Private banks are found mostly in the cities whereas cooperative and savings banks are almost everywhere, and are often exclusive in smaller villages. ATM (Geldautomat) are on nearly every corner. However, customers mostly have to use their bank's ATM with their

debit card A debit card, also known as a check card or bank card is a payment card that can be used in place of cash to make purchases. The term '' plastic card'' includes the above and as an identity document. These are similar to a credit card, but ...

if they don't want to pay a fee.

offers free ATM through the group. Using a

credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the ...

( Visa/ MasterCard/

Diners Club A diner is a small, inexpensive restaurant found across the United States, as well as in Canada and parts of Western Europe. Diners offer a wide range of foods, mostly American cuisine, a casual atmosphere, and, characteristically, a com ...

American Express American Express Company (Amex) is an American multinational corporation, multinational corporation specialized in payment card industry, payment card services headquartered at 200 Vesey Street in the Battery Park City neighborhood of Lower Man ...

) from a German bank in any German ATM generates a fee of about 3%. Most people prefer to use their EC/

Maestro Maestro (; from the Italian '' maestro'' , meaning "master" or "teacher") is an honorific title of respect (plural: maestros or maestri). The term is most commonly used in the context of Western classical music and opera, in line with the ubiqu ...

debit card. Many physical payments are still made in cash, but increasingly, Germans are using their EC/Maestro. Online payments are done mostly either with

direct debit A direct debit or direct withdrawal is a financial transaction in which one organisation withdraws funds from a payer's bank account., https://www.directdebit.co.uk/direct-debit-explained/what-is-direct-debit/ Formally, the organisation that calls f ...

(Lastschrift) or with credit card. Most of the banks offer a free main account ( Girokonto) as long as the customer deposits a minimum amount regularly (> €1000 income each month).

History

Market overview

See also

References

Further reading