Landesbank

Landesbanken in Germany are credit institutions that perform bank transactions for individual states and assist the country in the economic development.

History

Forerunner of today's state banks were the provincial relief funds. First was the provincial Hülfskasse Westphalia, which started its operations in Munster on January 5, 1832. Its articles of incorporation provided for a lending to repay debt and budget improvement of communities as well as for infrastructure measures. On June 23, 1832, the country's credit bank in Kassel, the state also accept deposits and private savings in contrast to Hülfskasse and was allowed to issue debt arose. Other provincial Hülfskassen subsequently emerged in 1847 in Saxony and Pomerania. On 7 February 1854, the Rhenish Provincial Hülfskasse adopted in Cologne on their activities. These laid on July 10, 1877 its headquarters to Dusseldorf, received on February 17, 1888 a new constitution and called now " Landesbank of the Rhine Province ". Since 1910, the importance of the payment function for state banks rose, as they were to the central clearing house in the acceleration of non-cash payments. Since February 1911, the Cologne Savings Bank took over the function of the Girozentrale for the Rhine Province. On 20 June 1914, the Rheinisch- Westfälische Sparkassentag in Cologne decided to use the state bank of the Rhine Province instead of the Cologne Savings Bank as Girozentrale.

Through the German banking crisis in 1931, the German currency and banking system was hit hard. Even the largest of the country's banks, the State Bank of the Rhine Province, stood before the collapse. This had long- term municipal funded by short-term investments of savings banks and was caught in a liquidity crisis in July 1931. She had to stop their payments on August 7, 1931. The coordination of the giro system of savings banks took over a branch of Deutsche Girozentrale in Cologne in August 1931. Support for the Reichsbank with a line of 200 million RM eliminated the liquidity problems of the state bank.

After 1935 the country banks were established or continued as a corporation under public law. Regional banks in the modern sense emerged after the Second World War, when the federal states issued their first national bonds with the help of the country's banks as leader of the underwriting syndicate. Since most states acted as frequent issuers, increased regional banks on the largest foreign issuers Germany. Country's banks were in the process of establishing an important instrument for achieving the financial infrastructure and economic policies of the countries.

From 1972, WestLB began to build up its branch network abroad in order to implement their international business organization can. All national banks followed suit, but suffered some significant losses, especially in the financial crisis from 2007. Larger corporate crises in banks should prevent that came into force in July 2009, the Financial Market Stabilisation Act further development by the way of setting resolution agencies, ie one per institution to be set up bad bank to outsource outstanding commitments divisions, opened. The crisis ultimately led to the first splitting of a Landesbank, WestLB AG, as of July 1, 2012.

Legal forms and support

Classical legal form of the Landesbanken is the public institution ( exceptions: HSH Nordbank AG and Landesbank Berlin AG). With this institutional liability and guarantor liability are automatically connected in public law. Its shareholders - called the carrier due to the mostly public legal form - nationwide are inconsistent. The ownership is from the respective state (BayernLB ), regional savings banks (Helaba ) to mixed forms with landscape associations and regional savings banks and giro associations (WestLB). Due to the legal form of conditional subsidiary guarantor liability of the federal state first emerged at WestLB, the issue of aid as the EU Competition Commission classified the equity increases in state banks from 1993 as distorting competition. With the Brussels concordance of July 2001, the guarantor's liability and maintenance obligation for all state banks (and savings banks ) was abolished or modified. The country's beacons are subject to state supervision by the highest representative of the Guarantors are automatic members of the administrative or supervisory board. The institutions of the state banks are the Executive Board, Supervisory Board / Board of Directors and Guarantors' Meeting. All national banks are members of the Association of German Public Sector Banks ( VÖB).

Tasks

Land banks are state and local banks in each State for which they perform all banking transactions, to advise it financially and thus perceive a bank function. Land banks are also authorized to conduct all activities authorized under its articles of association bankable business. In that regard, enter these institutions on the market for years as a commercial bank or universal bank. Press in particular in Kommunalkredit and home finance business, which they refinance through mortgage bonds or municipal bonds. Country banks generally take no retail banking ( exceptions: LBBW, Berlin and Nord LB ), but leave this task by dividing the savings banks. The savings banks operate business in particular small and medium-sized enterprises as well as the amount of business, while the country's banks focus on the business with large companies, high net worth private clients and institutional investors. This results in a strict market segmentation between the two groups of institutions. As part of the so-called vertical division of labor, the savings banks are, according to the principle of subsidiarity assume all tasks that perceive the same size due; the country's banks are only subsidiary to intervene where they are technically and / or size to consider. A size-related cooperation between Landesbanken and savings banks there are the joint credit for small businesses and real estate financing ( " construction financing from a single source ").

Strict separation of the tasks of the Landesbank Girozentrale is the function of a, which is usually also provided by the state bank.

Realignment

Horizontal integration there through mergers of regional banks with each other as in January 1969 between the "Rheinische Girozentrale and Provincial Bank " and the " Landesbank für Westfalen Girozentrale " to the " Westdeutsche Landesbank Girozentrale " or between the " Hamburg Landesbank " and the " Landesbank Schleswig -Holstein Girozentrale " for HSH Nordbank in June 2003. Vertical integrations were carried out between the Landesbank Baden -Württemberg and the Landesgirokasse Stuttgart in January 1999 or the Landesbank Hessen -Thüringen and the Frankfurter Sparkasse in February 2005.

The business model of state banks was increasingly a dilemma because on the one hand, is a decreasing function of bank observed, on the other hand they stay largely aloof from the savings bank markets. The elimination of the guarantor's liability and limited business models force the remaining state banks to mergers within the Landesbank sector, even if political obstacles to be overcome. Mergers can realize synergies, increase economies of scale, reduce costs, and lead to more favorable economies of scale. Privatization was required in 1993 ( Otto Graf Lambsdorff ), they would eliminate the criticized by the EU Competition Commission systemic problem with state banks because of their public ownership of equity increases. In the future, two other state banks, which have been managed in the legal form of a public institution, are run as private limited companies. These are the Landesbank Baden- Württemberg, which must be converted into a public limited company due to an EU target, and BayernLB, the full privatization was adopted in 2015 by the Bavarian state parliament.

Existing Landesbanken in Germany

• Bayerische Landesbank ( BayernLB)
• Bremer Landesbank Kreditanstalt Oldenburg- Girozentrale ( 54.83 % is held by the North German Landesbank )
• HSH Nordbank AG, which emerged from the Hamburg Landesbank and Landesbank Schleswig -Holstein Girozentrale
• Landesbank Baden- Württemberg ( LBBW)
• Landesbank Hessen -Thüringen Girozentrale ( Helaba)
• North German Landesbank Girozentrale ( Nord / LB)
• Landesbank Saar ( SaarLB )

Former Landesbanken in Germany

• Predecessor institutions of HSH Nordbank ( Fusion 2003): Hamburg Landesbank
• Landesbank Schleswig -Holstein Girozentrale (LB Kiel)

• West German Landesbank Girozentrale ( SüdwestLB and in 1999 merged with the Landesgirokasse Stuttgart and the market part of the State Bank of Baden- Württemberg and Landesbank Baden- Württemberg) Landesbank Stuttgart (1988 dawned in the West German Landesbank Girozentrale )
• Municipal Landesbank Baden (1988 dawned in the West German Landesbank Girozentrale )

Internationally

The counterpart of the national banks in Switzerland, the cantonal banks. They, too, are public institutions and - since Switzerland is not part of the EU - still equipped with state guarantees or cantonal guarantees. It is planned to abolish the cantonal guarantees medium term.