Banking in Germany is a highly leveraged industry, as its average

leverage Leverage or leveraged may refer to: *Leverage (mechanics), mechanical advantage achieved by using a lever * ''Leverage'' (album), a 2012 album by Lyriel *Leverage (dance), a type of dance connection *Leverage (finance), using given resources to ...

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 regions and territories in the Americas and the Atlantic, Pacific and Indian Oceans. Its metropolitan area ...

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 European mainland, continental mainland. It comprises England, Scotlan ...

is 24 to 1); its short-term liabilities are equal to 60% of the German

GDP Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...

or 167% of its national debt.

History

From the 15th century, banking families such as Fugger,

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 The family of Höchstetter (also rendered Hechstetter or Hochstetter), from Höchstädt in western Bavaria near the banks of the Danube, were members of the fifteenth and sixteenth-century mercantile patriciate of Augsburg. For a time, these i ...

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

, 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 Sto ...

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 ret ...

(acquired by Deutsche Bank), Unicredit Bank AG (HypoVereinsbank), Commerzbank and Dresdner Bank (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 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 network ...

'', '' 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 (C)

public bank A public bank is a bank, a financial institution, in which a state, municipality, or public actors are the owners. It is an enterprise under government control.

s, including local

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 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 o ...

(

Visa Visa most commonly refers to: *Visa Inc., a US multinational financial and payment cards company ** Visa Debit card issued by the above company ** Visa Electron, a debit card ** Visa Plus, an interbank network *Travel visa, a document that allows ...

/ 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) 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