Germany has a vital banking tradition that dates back to the great Fugger money-lending empire in the 15th and 16th centuries, and before that, the limited banking practices required by the Hanseatic League (Hansa) of northern Germany in the 14th century. Germany’s first commercial bank was established in Hamburg in 1619. The Giro bank lasted until its takeover by the state-run Reichsbank in 1875.
|The German Postbank, located in many post offices, offers full banking services including a “Geldautomat” (ATM). PHOTO © Hyde Flippo|
By the early 1800s Frankfurt am Main was a banking center under the House of Rothschild. The Rothschilds, in fact, took their name from the red (roth) shield (Schild) on the front of their Frankfurt home during the first years of the Jewish family’s history. Their banking dynasty soon extended beyond Frankfurt to London, Naples, Paris, and Vienna. Between 1870 and 1872 several other important German banks evolved, some of which are still around in one form or another.
[The rankings of Germany’s largest German banks have changed dramatically in the last few years. Among other changes, Dresdner Bank merged with Commerzbank, and the Dresdner name disappeared in 2010. - See current rankings.] Frankfurt’s present-day skyline consists largely of the gleaming towers that serve as headquarters for Germany’s banks, a sight that has led to one of the German financial capital’s nicknames: “Bankfurt.” In 1994 Frankfurt won the heated contest to house the European Monetary Institute (EMI), the precursor to the current European Central Bank which began operations in Frankfurt in January 1999 with the introduction of the euro. Now more than ever, Germany can rightfully bill itself as Finanzplatz Deutschland - Germany, the Financial Center. Until the European Central Bank began operation in 1999, Germany’s Bundesbank, known as the Buba to the financially literate, was Europe’s most influential central bank. For all practical purposes, the Bundesbank was to Europe what the U.S. Federal Reserve Bank is to the U.S. ...
Switzerland and banking are, of course, synonymous terms, with Zurich being the Swiss (and a world) financial center. Switzerland has nearly 600 banking institutions with many more branches and more than 1,100 savings banks (Sparkassen). In Austria the Creditanstalt bank and Bank Austria in the banking center of Vienna are two of the most important of the 1,100 financial institutions with 4,600 branches. [The two Austrian banks merged in 1997 and joined Germany’s HypoVereinsbank in 2000.]
Most people are more concerned about which bank is closest and offers the best rates and services than about financial philosophy. Banking in Germany is divided into three types of institutions: the larger private commercial banks, like those mentioned previously, the savings banks (Sparkassen), and the cooperatives or credit unions (Raiffeisenbanken, Volksbanken). But German banking has been going through changes since reunification, particularly in the eastern part of the country, with mergers and blendings of banking types that may change the German banking landscape considerably...
When you enter a German, Austrian, or Swiss bank, it looks pretty much like a bank in America, but there are a few differences—only some of which have to do with the language. Geldwechsel (money exchange), Girokonto/Sparkonto (checking/savings account), and Kasse (cashier’s window, teller) are the most important words to know. Many German banks, in characteristic German compartmentalization, only allow you to do certain things at certain windows. So watch for those signs. There is, however, a newer tendency for banks to be less specialized by window, and to offer a variety of services, American style, at most teller windows.
One thing most banks still have is the “glass cage.” Whether you are cashing a traveler’s check or withdrawing funds, you usually have to go to a special cashier’s window, enclosed in thick bullet-proof glass, to collect your money. Although German banks usually have an open, relaxed interior decor, the glass cage is a reminder that Germany too has bank robbers.
Walk by any small-town bank in the most remote corner of Europe, and you will see the latest exchange rates for a multitude of national currencies on display (usually with colorful national flag symbols)...
Germans have a checking account system that Americans find a little confusing. In the U.S. the personal checking account is used for paying bills, buying goods and services, and checks are made payable to an individual or a company name. The Germans do it differently; they use a Geldüberweisung or money transfer made out to an account number [and] a name. To pay for a magazine subscription, for example, you make out a transfer check (Überweisung) payable not to the magazine but to a BLZ and Girokonto number. A BLZ is a Bankleitzahl or bank code number, similar to the bank numbers you see on U.S. bank checks. A Girokonto (ZHEE-ro KON-toh) is a specific transfer account for a firm, organization, or person. (The number of the magazine’s account would be printed on the order form for the magazine.) The Überweisung authorizes the bank to transfer a sum of money from your account to the magazine’s account (like a check), but you have to do it by the numbers, and instead of sending a check to the magazine, you send (or take) the Überweisung to your bank. [Today an electronic Geldüberweisung (EFT) is much more common.]
[The EC bank card is] accepted all over Europe by stores, businesses, hotels and restaurants. the EC card ... is a type of bank guarantee card and credit card. You can obtain a Eurocheque account through a European bank, once you have established a good credit record. The bank can also provide automatic payment or electronic transfers for monthly or other regular billings. Almost any banking service you would expect in the U.S., plus some not offered in the U.S., is available from a European bank. If you have a computer [with Internet access], home banking is also available in Germany...
NEXT > Part 2: German Banks Ranking
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Book excerpt ©1999 McGraw-Hill/Passport Books
Web content ©1997-2013 Hyde Flippo
- The Euro - Who uses it, history, facts
- The German post office - die Post with postal banking
- Business | Wirtschaft - German business and the economy
- Mayer Amschel Rothschild and the House of Rothschild
- Currency Converter
- Sending Money to or from Germany
- Links to money, bank, and business-related topics
- The euro - EU Website - All about Europe’s currency, which went into circulation in January 2002.
- Why Use a Foreign Exchange Service rather than your bank for foreign currency transfers? (WorldFirst)
- Rund ums Geld: Austrian National Bank - The Austrian view of the euro that replaced schillings in 2002. (English version)
- Postbank - Germany’s postal bank (in German)
- MasterCard - ATM Finder - Did you know there are over 2,000 ATMs in Austria? Click on “ATM Finder” to find where they are, in Germany or any other other country.
- Visa - ATM Finder - Click on “ATM Locator” on the Visa home page to locate ATMs anywhere in the world.
- Association of German Banks (BdB) - Lists the Top 100 German banks and other information. In English or German from the Bundesverband deutscher Banken.
- Sparkasse.de - Online savings banks (in German).