Germany

Abstract

All credit institutions are subject to State supervision and are defined in Article 1 of the 1961 Banking Law¹ as ‘enterprises engaged in banking transactions where the scope of those transactions requires a commercially organised business enterprise.’ Banking transactions consist of any of the following (not all credit institutions would engage in the whole range of transactions):

• (i) the receipt of monies from outside sources as deposits irrespective of the payment of interest (deposit business);

• (ii) the granting of money loans and acceptance credits (credit business);

• (iii) the purchase of bills and cheques (discount business);

• (iv) the purchase and sale of securities for the account of others (securities business);

• (v) the custody and administration of securities for the account of others (safe custody business);

• (vi) the transactions set out in Article 1 of the Law on Investment Companies of April 16, 1957, as amended (investment fund business, which is confined to certain specialised institutions);

• (vii) the incurring of obligations to acquire claims in respect of loans prior to their maturity;

• (viii) the assumption of guarantees and other warranties for others (guarantee business); and

• (ix) the carrying out of transfers and clearing transactions (giro business).