In Germany, industrialization began hesitantly from 1830 – a good 50 years later than in England. It picked up speed in the German Empire, but did not overtake England’s productivity until between 1890 and 1913.[1] Due to the peasants‘ liberation (until 1848) and the associated employment difficulties – and also due to the growing population – a rural exodus began. Existing cities grew and others emerged.[2] Countless cheap labor was looking for work – and found it in the factories. The share of wage workers in the labor force rose from around a quarter (1849) to three quarters by 1907.[3] But it was only through the considerable increases in industrial production between 1871 and 1914 that real economic growth was achieved in Germany, hunger as a mass phenomenon was eliminated and real industrial wages doubled.[4] „An old mechanism was thus overridden: In the past, economic growth in agricultural societies had repeatedly been overtaken and consumed by the increase in population.“[5]
“Growing capital requirements of the commercial and industrial economy and especially of the growth sectors such as railway, mining and mechanical engineering and iron and steel production, but also the start-up boom in joint-stock companies triggered by the liberalization of stock corporation law in 1870 led to an appreciation of the stock exchanges in Germany Financial system.“[6] In 1871 alone, 41 new banks were founded in Germany. „Bills of exchange were now accepted everywhere as a commercial means of payment and credit, and the cashless check system soon became part of everyday life in economic transactions.““[7] Thanks to the investments made in the post-war period and the war compensation received from France, the economy gained massive momentum – and the characteristic signs of speculative bubbles quickly became visible.[8] In 1873, as a result of this excessive speculation, a world economic crisis loomed – because in the previous decades there had been an international network of banks and trading partners, so that economic crises could no longer be nationally limited. In the phase from 1874 to 1895, economic growth in Germany was extremely low (one also spoke of the great ‚disenchantment‘). The boom that followed up to the First World War is now known as the ‚Gründerzeit‘[9] (i.e. the Wilhelminian time).
Since the 1870s, banks have been setting up branches known as deposit kiosks in order to take more deposits through the closeness to customers. In later years, other banking business offers will be gradually added.[10] The nationwide expansion of the savings bank network and the cooperative banks in Germany fell in the same period. The market structure of the universal banks, known today as the ‚three-pillar model‘, is created from private banks, cooperative banks and savings banks.[11] In April 1909, the savings banks were given the “passive check ability” by the Prussian ministry. This allowed the savings banks to “conduct savings and loan transactions as well as handle checks and transfers.“[12]
„During the First World War, individual companies merged to form so-called war societies. This also increases the loan amounts required, so that the banks are increasingly granting syndicated loans.“[13] With hyperinflation after World War I, interest rates rose to astronomical heights. During this time, for example, the price of a pound of butter rose from around 3 marks in January 1919 to 3,800 billion (!) Marks in November 1923.[14] Only when the currency stabilized in 1923/1924 did a brief phase of normalization begin. “The bank-based payment by installments in Germany did not begin until the mid-twenties, when large sections of the population had lost their wealth due to inflation. The accumulated savings had become worthless, and since the ongoing earnings of workers, clerks and civil servants were often insufficient for the immediate purchase of durable consumer goods, sales in installments increased.“[15] The German capital shortage that still existed as a result of the outcome of the war led to a worsening of the banking market at the end of the twenties. For this reason, the large and commercial banks discovered the savings business, i.e. the small-scale deposit business based on the model of the savings banks and cooperative banks, for themselves at the end of the 1920s. “When the Darmstädter und Nationalbank (Danat-Bank) stopped their payments on July 13, 1931, a run on the banks began. The government therefore declared July 14th and 15th to be bank holidays, on which the stock exchange was also closed.“[16] It was only this crisis that led to the establishment of a state supervisory structure in the banking sector in Germany, which was supposed to contain future financial crises through controls and requirements. Until then, a legal regulation of credit transactions was opposed for a long time, invoking the principle of “freedom of trade”.[17] „For the first time in Germany, the KWG[18] of 1934 made all credit institutions subject to authorization and ongoing state supervision.“[19]
The KWG “enabled the Reichsbank to pursue an ‚open market policy‘, ie the purchase and sale of government bonds, in order to be able to control the money supply directly and influence interest rates.“[20] The ‚Law on the Settlement Area of Credit Institutions‘ (KredInstNdlG[21]) of March 29, 1952, after the war, served to break up the large banks, which had grown strongly as a result of the Third Reich, into three successor institutions (each in North, West and South Germany for the zones of occupation) to limit the market power of these institutions. “As early as 1957, a year after the law on major banks was repealed, the successor institutes that had initially been re-established regionally merged into one bank each. The Deutsche Bank, Dresdner Bank and Commerzbank were thus re-established. In the same year the Deutsche Bundesbank was set up with essential structural elements of the central banking system introduced by the Allies.“[22] Companies increasingly started paying wages and salaries by bank transfer, and it was only now that private individuals (in addition to their savings accounts) began to open current accounts on a large scale.
„With the establishment of the Federal Supervisory Office for the Entire Credit System (BAKred[23]) in 1961 […] the institutional end point for the development of the regulatory model was laid, which was to remain functional until the 1990s.“[24] Until March 21, 1967, the BAKred regulated a uniform credit interest rate for investments in the German banking industry through the Interest Ordinance (with an interruption after the war, this regulation followed the emergency decree of the ‚Competition Agreement‘ of December 8, 1931) and linked the borrowing rates to the Discount rate. After that, there was (again) no interest-rate regulation in Germany.
Supported by the development of the euro market, a phase of internationalization began for the German banks and the German financial market at the end of the 1960s. In 1974 the Herstatt bank accumulated high losses from currency forwards and collapsed as a result. In response to this, the Bundesbank created the liquidity syndicate bank (with a 30% stake in the capital), thereby enabling banks “that have got into temporary liquidity difficulties through no fault of their own, to provide liquidity assistance“[25]Due to the Herstatt bankruptcy, the then federal government threatened the introduction of a statutory deposit guarantee if the private banks did not come to a satisfactory solution. “As early as mid-April 1975, State Secretary Karl Otto Pöhl from the Federal Ministry of Finance and President Friedrich Wilhelm Christians from the Federal Association of German Banks reached a fundamental agreement on improved deposit protection in the private banking sector. It is envisaged that all banks affiliated to the association will pay three per thousand of their non-bank deposits into a security fund.“[26] This continues to this day.
The high wage increases in the early 1970s, as well as the oil price shock (1973) as a result of the Yom Kippur War, led to a massive increase in inflation. As a result, the interest rate rose dramatically – in the summer of 1973, an interest rate of 30% had to be paid at times to borrow money. After the end of Bretton Woods and the release of exchange rates, the Bundesbank was now in a position to effectively control the money supply via the interest rate level – without creating uncontrollable foreign exchange inflows or outflows.[27]
The Latin American sovereign debt crises in the 1980s led to increased international efforts to achieve greater financial stability by working across countries with uniform or at least comparable supervisory rules. This was the core of the first task of the Basel Committee on Banking Supervision (BCBS). It was founded in 1974 by the G10 and is the most important body worldwide that defines the norms of banking regulation and serves as an exchange platform on questions of banking regulation. Its mandate is to globally strengthen banking supervision with regulations, procedures and banking practices, thereby contributing to the stability of the financial markets.[28]
„As quantitative requirements, the Basel Accord contains minimum requirements for the equity capital of a credit institution amounting to eight percent of the so-called risk-weighted assets, which should be introduced with a transition period by the end of 1992.“[29]
The reunification temporarily led to a special boom in Germany, which initially made it possible to escape the global recession. But gradually the size of the task and the costs of reunification became apparent. “In 1994 things slowly started to recover in Germany, but a real recovery only began two years later. In the meantime, the euro was finally on its way. As of January 1, 1999, the foreign exchange and capital markets used the new currency, which was also introduced as an official means of payment in all participating countries at the beginning of 2002. „[30]
The introduction of Basel II (starting from 2004) by the BCBS and the changed attitude of the companies towards their house bank forced the credit institutions to a risk-adjusted pricing of their loans. In the previous decades, companies had to answer the question of credit with a simple ‚yes‘ or ’no‘ and the credit risk was a question of collateral provided. Basel II required an allocation of capital (“backing”) that takes into account the credit risks (i.e. the risk of the expected loss from default by the debtor). At the same time, customers began to open up to more banks and to split up their business. The longstanding cross-subsidization across all bank services no longer worked. It was only the mandatory rating for borrowers introduced by Basel II that led to the return of an old perspective „which was still a matter of course for moneylenders in the Middle Ages: the interest rate is based on the risk of default.“[31]
Up until that time, the relationship manager for corporate customers was usually the first clerk who primarily got and had to deal with customer inquiries and requests. Up until the nineties, the freeing of active sales time was only discussed in isolated cases; In any case, it was generally insufficiently measured due to the connection with the processing topics. The broader change began with the introduction of the minimum requirements for the lending business (MaK[32]), which have now been incorporated into MaRisk[33]. A separation of functions has been established, which has to divide front office / sales from risk / back office right through to management. This separation of functions is the institutionalized cornerstone of today’s role of the corporate account (i.e. the relationship) manager, as the interface to a bank’s customer was considerably relieved of the time-consuming activities of loan processing.
This individual gain in available time for sales – it may well be leveled out at the institute level – meets a sales culture that has grown over decades and has hardly any experience with actively approaching customers or proactively using these new time resources. Culturally one was used to the application business, that is: the customer came to the bank and said what he wanted or asked for it. Loans were not sold, they were in demand. In addition, this market development model has resulted in the main focus being on customers who have made themselves getting noted in some way. Inconspicuous or silent customers tended to be ignored.
“On behalf of the G20, the BCBS developed [new] guidelines that were published in 2010 and known as ‚Basel III‘. The extensive set of rules includes guidelines to strengthen the quality, quantity and flexibility of equity capital, reducing the cyclical nature of regulatory capital requirements, stricter capital requirements for individual risk-weighted assets, more intensive supervision of systemically important banks and international liquidity standards“.[34]
This increases the level of demands placed on every bank or corporate customer advisor, and at the same time the potential competition between banks increases when customers on the one hand become more self-confident and, on the other hand, have a lower need for external financing than in the past. Market cycles can temporarily cushion or intensify this development – but only temporarily.
In addition, with the now active management of a bank’s equity, the additional sale of services and other products (cross-selling) to customers has become significantly more important. Starting with a loan or a line of working capital as an anchor product, further customer needs should and will be identified, addressed and covered. This development has been quite heterogeneous in the institutes or institute groups, but it can be assumed that competitive pressure and digitization will have to lead to a tendency towards harmonization in the medium term.
Corporate customers remain a heterogeneous customer group, especially in classic German medium-sized companies, with high demands on their bank and their advisors. We are experiencing shifts in the product and competitive landscape, both due to digitization and FinTechs, as well as changed market participants. For example, the sub-segment of externally financed mobile equipment investments is now (since the financial crisis of 2008) clearly in the hands of the so-called captives, manufacturer-linked leasing companies, and loan financiers who are either manufacturer-linked or have entered into a POS[35] cooperation with a retailer. In this submarket, more than 50% of the market bypasses the generalist banks.
[1] cf. Berg, 1988, p94
[2] cf. Berg, 1988, p113
[3] cf. Berg, 1988, p154
[4] cf. Berg, 1988, p211
[5] Osterhammel, 2012, p40
[6] Lütz, 2002, p80
[7] Epkenhans / Seggern, 2007, p89
[8] cf. Berg, 1988, p263
[9] cf. Berg, 1988, p267f.
[10] cf. Krause, 2010, p23
[11] cf. Grill/Perczynski, 1998, p42
[12] Lütz, 2002, p119
[13] Krause, 2010, p32
[14] cf. Wettengel/Grotz, 2013
[15] Hagenmüller/Diepen, 1987, p473
[16] Krause, 2010, p57
[17] cf. Lütz, 2002, p117
[18] KWG = Kreditwesengesetz = German banking act
[19] Hein, 1993, p97
[20] Frien, 2004, p105
[21] KredInstNdlG = Gesetz über den Niederlassungsbereich von Kreditinstituten
[22] Lütz, 2002, p. 125
[23] BAKred = Bundesaufsichtsamt für das Kreditwesen, merged in 2002 into the BAFin
[24] Lütz, 2002, p. 126
[25] FAZ, 2003
[26] Herft, 1975
[27] cf. Frien, 2004, p131f.
[28] cf. https://www.bis.org/about/index.htm [checked: 06.08.2021]
[29] Rein, 2016, p53
[30] Frien, 2004, p156
[31] Frien, 2004, p. 165
[32] MaK = Mindestanforderungen an das Kreditgeschäft = minimum requirements for lending business
[33] MaRisk = Mindestanforderungen an das Risikomanagement = minimum requirements for risk management (from banking supervision)
[34] Rein, 2016, p. 59
[35] POS = point-of-sale
Ressources
Berg, Rudolf et al (1988): Grundkurs Deutsche Geschichte: Ein Lehr- und Arbeitsbuch für die Kollegstufe in Bayern. Band 1: 1800 – 1918. 4. Auflage. Cornelsen, Berlin. URL: https://epub.ub.uni-muenchen.de/4935/1/4935.pdf [Stand: 04.01.2016]
Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) (2015): Jahresbericht der Bundesanstalt für Finanzdienstleistungsaufsicht 2014. Bonn: Projekt-PR URL: http://www.bafin.de/DE/DatenDokumente/ Dokumentlisten/ListeJahresberichte/liste_jahresberichte_node.html [Stand: 10.11.2015]
Epkenhans, Michael und Seggern, Andreas von (2007): Leben im Kaiserreich. Deutschland um 1900. Konrad Theiss Verlag GmbH, Stuttgart
Frien, Bastian (2004):
Zurück auf Null. Die Zeit der Weltkriege (1914-1945). In: Hertz-Eichenrode, Albert (Hrsg.): Süßes Kreditgift. Frankfurt/Main: F.A.Z. Institut für Management-, Markt- und Medieninformationen GmbH, 89 – 109
Frien, Bastian (2004):
Das süße Gift des billigen Geldes. Die Bundesrepublik Deutschland (1945-1990). In: Hertz-Eichenrode, Albert (Hrsg.): Süßes Kreditgift. Frankfurt/Main: F.A.Z. Institut für Management-, Markt- und Medieninformationen GmbH, 110 – 146
Frien, Bastian (2004):
Renaissance des Risikos. Unternehmensfinanzierung seit den Neunzigerjahren. In: Hertz-Eichenrode, Albert (Hrsg.): Süßes Kreditgift. Frankfurt/Main: F.A.Z. Institut für Management-, Markt- und Medieninformationen GmbH, 155 – 168
Grill, Wolfgang und Perczynski, Hans (1998): Wirtschaftslehre des Kreditwesens. 32. Auflage. Verlag Dr. Max Gehlen GmbH & Co. KG, Bad Homburg von der Höhe
Hagenmüller, Karl Friedrich und Diepen, Gerhard (1987): Der Bankbetrieb. Lehrbuch und Aufgabensammlung. 11. Auflage. Betriebswirtschaftlicher Verlag Dr. Th. Gabler GmbH, Wiesbaden
Krause, Detlef (2010): Commerzbank 1870 – 2010: Eine Zeitreise. Eugen-Gutmann-Gesellschaft, Dresden. URL: http://www.eugen-gutmann-gesellschaft.de/upload/ commerzbank140jahre.pdf [Stand; 27.04.2016]
Lütz, Susanne (2002): Der Staat und die Globalisierung von Finanzmärkten: Regulative Politik in Deutschland, Großbritannien und den USA. Campus Verlag, Frankfurt / New York
Osterhammel, Jürgen (2012): Das 19. Jahrhundert. In: Informationen zur politischen Bildung, H. 315, Bundeszentrale für politische Bildung/bpb, Bonn
Rein, Stefan (2016): Konsequenzen veränderter Finanzierungsbedingungen für die Bauwirtschaft. BBSR-Online-Publikation Nr. 01/2016. Bundesinstitut für Bau-, Stadt- und Raumforschung (BBSR) im Bundesamt für Bauwesen und Raumordnung (BBR), Bonn. URL: http://www.bbsr.bund.de/BBSR/DE/ Veroeffentlichungen/BBSROnline/2016/bbsr-online-01-2016-dl.pdf?__blob=publicationFile&v=3 [Stand: 27.04.2016]
Vertriebsmanagement 