acts as the Central Bank for the Federal Republic of Germany
and was, in fact, the first Central Bank in the world to be given full independence. Its core business areas include the Eurosystem monetary policy
, banking supervision, the financial and monetary system, cash operations, and cashless payments. With regard to the monetary and financial system, the bank aims at preventing national as well as international financial crises. The bank’s financial market observations and analysis help in recognizing sources of risk so that appropriate countermeasures can be developed in the early stages of crises. In terms of banking supervision, Deutsche Bundesbank aims to safeguard the stability of financial markets and ultimately, to increase the stability of Germany’s financial system. The Central Bank is also responsible for the reserve asset management and a variety of tasks in the statistics field. Deutsche Bundesbank is the fiscal agent and the advisor of the federal government on matters related to monetary policy.
The main office of the bank is located in Frankfurt, Germany. Deutsche Bundesbank operates a network of nine regional offices which are responsible for monitoring of financial service providers and crediting institutions in their respective regions. Another responsibility of the regional branches is informing the general public about monetary policy, money related issues, and the financial markets. The offices also analyze the creditworthiness of banks applying for refinancing from Deutsche Bundesbank. In order to qualify, the banks have to deposit collateral. In addition, the Central Bank operates a network of 47 branches that are subordinate to the regional offices in their regions. The offices supply Euro banknotes
and coins for the economy and offer individual customers the opportunity to exchange their Deutsche Marks for Euros free of charge.
Deutsche Bundesbank was established in 1957 as a successor of the Bank deutscher Länder. During the second half of the twentieth century, the bank was successful in keeping inflation under control; thus, it gained considerable indirect influence over the financial matters of many countries in Europe. Today, Deutsche Bundesbank forms part of the European System of Central Banks
. The bank participates in the performance of tasks related to the ESCB functioning and arranges for the timely and proper execution of international and domestic payments. Deutsche Bundesbank handles tasks jointly with the European Central Bank in four main areas: acting as a note-issuing institution, operating as the bank’s as well as the state’s banker, and managing the currency reserves
. In its role as a note-issuing institution, Deutsche Bundesbank provides cash and ensures the circulation of cash for the country’s economy. As a bank’s banker, the body acts as clearing house and a source of refinancing for the commercial banks in Germany. The bank also helps to regulate
the activities of commercial banks
. As the state’s banker, Deutsche Bundesbank offers normal banking services to the local, state and federal authorities and statutory social security organizations. The bank also provides accounts to them and these need to have a positive balance. In addition, Deutsche Bundesbank is the keeper of currency reserves such as foreign exchange
, gold reserves, credit with foreign banks, securities in foreign currency, etc. The bank can invest them for profit and intervene in the market in case of strong exchange rate fluctuations.
The Executive Board of the bank consists of its President and Chairman Professor Alex Weber, Vice-President Professor Franz-Christoph Zeitler, Dr. Hans Georg Fabritus, Dr. Thilo Sarrazin, Professor Hans-Helmut Kotz, and Dr. Rudolf Böhmler. Current projections with regard to staff development expect a decrease in core staff to about 9000 employees by 2012. In comparison, in 1991, Deutsche Bundesbank employed 16,500 officials.
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