The financial crisis has highlighted the importance of deposit protection and has brought this neglected topic to the core of the debate on financial stability (Zimmermann, 2013). Germany was hit harder than most experts and politicians expected. The federal government was forced to take unprecedented steps, including the nationalization of banks and providing an unlimited guarantee on savings deposits. These actions illustrated the necessity to reform the German deposit system, opening a controversial debate on both, the national and European level.
Deposit protection schemes serve two main functions. First, they provide security to depositors and should help to prevent bank runs. Second, they should facilitate bank resolution, shielding depositors from losses. Together with financial regulation and supervision and lenders of last resort, deposit protection represents a key component of financial safety nets, which aim at reducing the occurrence of financial crises and limiting their effects if they do occur. Accordingly, deposit insurance schemes play an important role for individual market participants as well as for the entire economy.
This paper examines the German deposit insurance system before, during, and after the financial crisis. It answers three main questions: First, what was the state of the deposit insurance system before the financial crisis? Second, how did the deposit schemes fared during the crisis? Third, what reforms have been introduced and what is the current state of the system?
Inhaltsverzeichnis (Table of Contents)
- Introduction
- The German Banking System
- Private Commercial Banks
- Public Sector Banks
- Sparkassen
- Landesbanken
- Cooperative Banks
- Financial Globalization and Bank Deposits
- German Deposit Insurance System before the Financial Crisis
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper investigates the German deposit insurance system during and after the financial crisis, examining its pre-crisis state, its performance during the crisis, and subsequent reforms. It aims to understand the impact of financial globalization on bank deposits and the system's evolution in response to the crisis.
- The structure and evolution of the German deposit insurance system
- The impact of financial globalization on the risk and security of bank deposits
- The role of deposit insurance schemes in ensuring financial stability
- The challenges and reforms faced by the German deposit insurance system in the wake of the financial crisis
- The impact of the EU Directive on Deposit Guarantee Schemes on the German system
Zusammenfassung der Kapitel (Chapter Summaries)
The paper begins by introducing the three pillars of the German banking system: private commercial banks, public sector banks (including Sparkassen and Landesbanken), and cooperative banks. It then explores the impact of financial globalization on bank deposits, highlighting the increased risk and regulatory challenges it presents. The paper subsequently examines the German deposit insurance system before the financial crisis, emphasizing its fragmented nature, lack of transparency, and undercapitalization. It then analyzes the system's performance during the crisis and the subsequent reforms implemented to address its shortcomings.
Schlüsselwörter (Keywords)
The paper focuses on key topics such as deposit insurance, financial stability, financial globalization, bank deposits, the German banking system, and the impact of the financial crisis on the German deposit insurance system.
- Citation du texte
- Armand Zorn (Auteur), 2015, The German Deposit Insurance System under Scrutiny, Munich, GRIN Verlag, https://www.grin.com/document/304203
