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The Landesbank der Rheinprovinz or Rheinische Landesbank was a German provincial public bank or Landesbank, whose origins go back to the Rheinische Provinzial-Hülfskasse () established 1854 in the
In February 1888, the Rheinische Provinzial-Hülfskasse was renamed the Landesbank der Rheinprovinz. On , the Landesbank opened a branch in Cologne.
In the 1920s, the Landesbank, led by Hubert Bel and August Bernegau, expanded dramatically by aggressively lending to municipalities with few internal controls and insufficient capital. As a consequence, it collapse in mid-1931 when the financial environment became unfavorable. German interior ministry official identified the Landesbank's alarming financial position during an on-site inspection in mid-June 1931, but that was too late to prevent disaster. The Landesbank der Rheinprovinz suspended payments on .
The Landesbank der Rheinprovinz or Rheinische Landesbank was a German provincial public bank or Landesbank, whose origins go back to the Rheinische Provinzial-Hülfskasse () established 1854 in the Rhine Province
The Rhine Province (german: Rheinprovinz), also known as Rhenish Prussia () or synonymous with the Rhineland (), was the westernmost province of the Kingdom of Prussia and the Free State of Prussia, within the German Reich, from 1822 to 1946. It ...
of Prussia. Following uncontrolled expansion in the 1920s, it collapsed in 1931, shortly after Austria's Creditanstalt and before Danatbank
The Darmstädter und Nationalbank (short form Danat-Bank) was a German bank.
History
The Darmstädter und Nationalbank was formed in 1922 from the merger of the Bank für Handel und Industrie (Darmstadt) and the Nationalbank für Deutschland ...
, thus contributing materially to the European banking crisis of 1931
The European banking crisis of 1931 was a major episode of financial instability that peaked with the collapse of several major banks in Austria and Germany, including Creditanstalt on , Landesbank der Rheinprovinz on , and Danat-Bank on . It tri ...
.
The Landesbank der Rheinprovinz was a direct predecessor entity of Westdeutsche Landesbank (WestLB), which had its head office in Düsseldorf on the same grounds where the Rheinische Landesbank had been established. WestLB in turn collapsed in 2007–2008 after uncontrolled balance sheet expansion, in an echo of the previous episode of 1931.
''Rheinische Provinzial-Hülfskasse''
The Rheinische Provinzial-Hülfskasse was established in Cologne on with capital of 400,000 thalers, on a statutory basis of . Its mandate was not about making profits but "supporting institutions, municipal buildings or commercial companies with loans, paying off municipal debts, and promoting the savings bank system through centralized management of savings." The Provincial Parliament of the Rhine Province took charge of oversight of the Rheinische Provinzial-Hülfskasse in September 1871. As a consequence, on the fund's head office was relocated from Cologne to the parliament's seat in Düsseldorf, against the will of the fund's directors who preferred Cologne as a more vibrant financial center at the time.''Landesbank der Rheinprovinz''
In February 1888, the Rheinische Provinzial-Hülfskasse was renamed the Landesbank der Rheinprovinz. On , the Landesbank opened a branch in Cologne.
In the 1920s, the Landesbank, led by Hubert Bel and August Bernegau, expanded dramatically by aggressively lending to municipalities with few internal controls and insufficient capital. As a consequence, it collapse in mid-1931 when the financial environment became unfavorable. German interior ministry official identified the Landesbank's alarming financial position during an on-site inspection in mid-June 1931, but that was too late to prevent disaster. The Landesbank der Rheinprovinz suspended payments on .
Aftermath
The function of payments clearing house (german: ) was taken over in August 1931 byDeutsche Girozentrale
DekaBank Deutsche Girozentrale is the central provider of asset management and capital market solutions of the Sparkassen-Finanzgruppe. It is registered in both Frankfurt and Berlin, with main operational headquarters in Frankfurt. It traces its ...
, a national institution established in 1918, through its Cologne branch which from October 1931 was led by . That branch took over staff of the former Landesbank and received liquidity support of 100 million Reichsmarks from the Reichsbank, which it largely passed on to savings banks. In April 1935, the business was in turn transferred to the newly formed , of which Butschkau would become chairman in 1945. In 1969, merged with to form Westdeutsche Landesbank.
See also
* LandesbankNotes
Defunct banks of Germany Landesbanks {{bank-stub