Germany 's Banking System And Economic Growth Essay

732 Words Apr 22nd, 2016 3 Pages
Germany is recognized as the largest and strongest economy in Europe through its abundance in exports and skilled labor force. Germany’s banking system has contributed to its continuous economic growth. The nation overcame a series of economic crises including post-war reparations, the German reunification in 1990, and the mortgage and banking crash in 2007. Despite these difficulties, the country manages to remain affluent with the support of its financial institutions. The banking sector in Germany is characterized by a three-pillar system which is composed of private commercial banks, public savings banks, and cooperative banks. The most influential aspect of the nation’s prosperity is the central bank of Germany, the Bundesbank, which was established in 1957 and is recognized as the world’s first fully independent central bank. The Deutsche Bundesbank is located in Frankfurt, Germany and manages a group of nine offices throughout regions of Germany. Its main task is to supervise the nation 's banking system and monetary measures. The current president of the Bundesbank, Jens Weidmann, strongly advocates the independence of central banks, which has contributed to its independence from government intervention. The Bundesbank supports a German philosophy with conservative and cautious beliefs, as a result of the Great Inflation post World War I. The law which established the bank mandated the preservation of German currency and the institution today still holds this decree…

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