12 December 2006

EZA 772 Briefing Note:

Germany – Banking Sector

Bundesbank moderates the debate on savings banks – congress signals that the concept of structural change appears to have finally taken hold The three pillar structure of German banking – private banks, co-operative banks and savings banks – is increasingly becoming the subject of debate. Bundesbank held a congress (17/18 Nov) on the advantages of private versus public savings banks. The supporters of the current system point to the high funding capacity of savings banks, which benefits small and medium sized companies. The critics cite potential efficiency gains and higher profitability in primarily privately run banking systems. The concept of structural change appears to have finally taken a hold on the German banking system Under discussion, albeit indirectly, was the direction and possible future shape of the German banking system in response to the challenges from international financial market integration.

© Graham Bishop