Germany's state-owned banks are emerging as winners from the financial tumult that has rocked Europe's largest economy and its neighbours in the last two weeks.Sparkasse savings bank and other state-run banks like it are awash in new business since late September, as Germans rush to deposit money where they perceive it will be safest.According to a survey conducted by Bild, deposits at Germany's 16,000 branches of Sparkasse have increased by more than 1bn euros since the financial crisis unfolded two weeks ago. Meanwhile, Haspa, Germany´s biggest savings bank in Hamburg, has recorded fresh deposits of 500m euros.As Chancellor Angela Merkel prepared to announce a 480bn euro rescue package for German banks with around 80bn in fresh capital and 400bn slated as loan guarantees the trend being seized upon by the average German investor was clear."A while ago banks could not be international enough. The only ones that were 'modern' were those that were active on international markets," Michaela Roth, spokesperson for the German Savings Bank Association said.
Sparkasse savings bank and other state-run banks like it are awash in new business since late September, as Germans rush to deposit money where they perceive it will be safest.
According to a survey conducted by Bild, deposits at Germany's 16,000 branches of Sparkasse have increased by more than 1bn euros since the financial crisis unfolded two weeks ago. Meanwhile, Haspa, Germany´s biggest savings bank in Hamburg, has recorded fresh deposits of 500m euros.
As Chancellor Angela Merkel prepared to announce a 480bn euro rescue package for German banks with around 80bn in fresh capital and 400bn slated as loan guarantees the trend being seized upon by the average German investor was clear.
"A while ago banks could not be international enough. The only ones that were 'modern' were those that were active on international markets," Michaela Roth, spokesperson for the German Savings Bank Association said.
I've never understood this desire by 'normal' banks to rush for this model (I understand bankers pushing for it: the bonuses were wild) In the long run, we're all dead. John Maynard Keynes
Sparkasse savings bank and other state-run banks
Except they're not state run.
Sparkassen and Landesbanken (and statutory health insurers and public broadcasters) are so-called "corporations under public law": publicly chartered companies that autonomously perform a public mission. The supervisory boards (quite properly) include representatives from the appropriate level of government, but the organizations are all managed by trained professionals (in Germany, there exists a vocational qualification and a degree program especially for the Sparkassen).
The state has no role in their management.
Also, the Sparkassen are not "state" so much as "municipal" - cities and counties.
It is worth emphasizing that the reason the public-law banking sector has come through the credit crunch largely unscathed is because they have adhered to their mission of providing credit and savings opportunities to small savers and businesses, respectively general economic development in the case of the Landesbanken. The exceptions like WestLB screwed themselves by trying to be high flyers. The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
