The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

KfW: The quiet giant of German finance

With a balance sheet of €486 billion, KfW is Germany’s third-largest bank and a key player in German finance. Does it provide a protective cloak to the country’s financial well-being or cast a shadow over its banking sector?

KFW_3 pillars_780

Illustration: Kevin February



 

IN ADDITION        

When in 1948 the US and British occupation authorities in Germany were squabbling over how much to enfeeble the banking sector that had financed the Third Reich, they eventually reached a compromise that endures to this day.

To complement the heavily decentralized commercial and central banking sectors in ‘Bizonia’, as their jointly run territory was informally called, would be an institution that could provide desperately needed longer-term credit to rebuild Germany.

Sir Eric Coates, finance chief of the British military government, proposed a ‘Reconstruction Loan Corporation’ – so named by him to remind the firmly decentralizing Americans he was haggling with of their own government’s nationwide Reconstruction Finance Corporation. It was to be a “capital distribution agency” rather than a bank; and one with a legally restricted borrowing limit.

The KfW Law, passed in November 1948 after much to-ing and fro-ing among the occupiers and with the occupied, stipulated an institution that was not to take deposits or have branches and was to distribute funds via other credit institutions, where they themselves “are not in a position to provide the required means”.




You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree