Banking in Germany


Banking in Germany is a highly leveraged industry, as its average leverage ratio as of 11 October 2008 is 52 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, Welser and Hochstetter 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, and is the world's oldest or second oldest bank, depending on the exact definition.

Market overview

Germany has universal banking.
The private customer mostly has to choose between three kinds of banks :
  1. private banks : the largest ones are Deutsche Bank, Postbank, Unicredit Bank AG, Commerzbank and Dresdner Bank they cooperate as the Cash Group
  2. cooperative banks: see German Cooperative Financial Group
  3. public banks, including local savings banks: Sparkassen and Landesbanken, see Sparkassen-Finanzgruppe
Private banks are found mostly in the cities, whereas cooperative and savings banks are almost everywhere and are often exclusive in smaller villages.
ATMs are on nearly every corner. However, customers mostly have to use their bank's ATM with their debit card if they do not want to pay a fee. Cash Group offers free ATMs through the group. Using a credit card from a German bank at any German ATM generates a fee of about 3%. Most people prefer to use their EC/Maestro 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 or with a credit card.
Most banks offer a free main account as long as the customer deposits a minimum amount regularly.