Credit institution

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A credit institution or financial institution ( English credit institution ) is a company that conducts banking business on a commercial basis or to an extent that requires a commercially set up business . In Germany this is the legal definition in Section 1 of the German Banking Act (KWG), so that it is sufficient to conduct banking transactions alone. The totality of all credit institutions as well as the legal or other regulations are summarized under the term banking system , including banking or credit.


Just doing banking turns a company into a credit institute and not just the granted license . To qualify as a credit institution, it is sufficient if a company only conducts a single banking transaction repeatedly. Section 1 (1) KWG finally lists a catalog of a total of 11 types of business as banking transactions, so that transactions not listed here do not constitute banking transactions. The types of business include, in particular, deposit business , lending business , securities custody business and the assumption of issues .

In an economy based on the division of labor , credit institutions take on the role of financial intermediaries as intermediaries in the real economy . The main focus is on:

If the services of the economic agents are exchanged with the interposition of money or capital , credit institutions are required as intermediaries. You also manage the balance of investment and loan requirements and thus act as a financial intermediary. Credit institutions have the possibility of creating money . On the one hand, they are severely affected by disintermediation , on the other hand, they tried to complete the value chain through efforts to become an all-finance company .

Due to their importance in the economic cycle, credit institutions are subject to a number of national and international legal and supervisory regulations. Your business conduct is monitored by the banking regulator , which is in almost every country. It is carried out by the competent authorities, sometimes also by the central bank.


The following groups of financial institutions fall under the generic term:

Central bank

As central banks , central banks perform special state tasks so that they are usually not formally counted among the credit institutions (cf. Section 2 (1) No. 1 KWG). They are subject to special legal regulations that define their specific role. You have the sole right to issue banknotes . A central bank often acts as the “bank of the banks”, ie its main group of customers are credit institutions so that it can operate its currency and monetary policy through the credit institutions ; it is also the house bank of the state, which conducts its banking business through it. Companies and private individuals are referred to commercial banks (banks, savings banks, cooperative banks) to process their credit transactions. In Germany, section 2 of the KWG exempts the Deutsche Bundesbank from the application of this law.

In Europe, in connection with the creation of the common currency, the euro , various states have transferred certain tasks performed by a central bank to the European Central Bank .

Universal banks

Universal banks , also known as commercial banks, are credit institutions that operate all types of banking business and offer them to all customer groups.


The group of banks includes major banks , regional banks , branches of foreign banks and private banks . According to the terminology used by the Deutsche Bundesbank, they form the aggregate of credit banks as a whole .

Savings Banks and Landesbanken

These include the public and independent savings banks, DekaBank Deutsche Girozentrale and all Landesbanken.

Cooperative banks

In Germany, the cooperative banks can often be recognized by names such as Volksbank , Spar- und Loankasse , Sparda-Bank , PSD-Bank or Raiffeisenbank . DZ Bank is also assigned to this sector .

Specialized banks

Specialist banks are those credit institutions that only conduct certain types of banking business with a discretionary group of customers.

Real estate credit institutions

The real estate credit institutions include private mortgage banks , ship banks such as Deutsche Schiffsbank AG and public-law basic credit institutions .

Building societies

Private and public building societies form another group of financial institutions. The Bausparkassengesetz applies to them in Germany.

Installment banks

The classic field of a partial payment bank is in the consumer lending and is used for consumer finance . This banking group also operates leasing finance.

Car banks

Automotive banks deal with the financing of motor vehicles by credit granting or leasing .

Group banks

Group banks are group- bound banks that either the intra-group financing accept or with customers outside the group in business relationship occurred.

Credit institutions with special tasks

These banks were created for specific purposes. The better known of this type in Germany include AKA Export Credit , IKB Deutsche Industriebank and Landwirtschaftliche Rentenbank . The state funding institutes should also be mentioned here. The Kreditanstalt für Wiederaufbau is assigned to this category in the banking statistics, but the KWG only applies to them to a limited extent.

Other credit institutions

Supranational credit institutions based abroad , for example the Bank for International Settlements , the European Investment Bank and the International Monetary Fund fall into this category. There are also international development banks , such as the European Bank for Reconstruction and Development .

Investment banks have developed particularly in the Anglo-Saxon region. In Germany, the trend towards a universal credit institute with all types of banking business has opened up few opportunities for financial institutions specializing in this market segment.

No credit institutions

According to § 2 KWG, the German Federal Bank , social security agencies including the Federal Employment Agency , federal and state debt administrations , insurers , investment companies and pawnbrokers are not credit institutions .

Differences in the banking industry

There is no uniform design at the credit institutions, but there are differences.

Legal forms

The credit institution can either be a company under private law or a legal person under public law .

Private law companies

The following legal forms exist:

Newly founded companies that do not comply with the dual control principle anchored in the KWG , for example because only one legal representative is named, do not receive a permit from the supervisory authority to conduct business in Germany.

Public law company

These credit institutions are predominantly active in the market in the legal form of an institution under public law (savings banks, Landesbanken, credit institution for reconstruction). Three Landesbanks ( HSH Nordbank AG, WestLB AG and Landesbank Berlin AG) are currently (as of April 2010) organized in the legal form of a stock corporation.

The Deutsche Bundesbank is a federal legal entity under public law ( Section 2 of the Bundesbank Act).


Another distinguishing criterion is the business purpose pursued.

  • Most credit institutions are business-oriented. They want to achieve a high profit , which they distribute to their shareholders in compliance with the legal regulations .
  • Another group operates under the idea of charitable status . In particular, the savings banks are required generated surpluses from their operations which, after the necessary reinforcement to use their equity remain, to support various charitable or social purposes.
  • With the cooperatives, on the other hand, the focus is on promoting the interests of their members.


Detailed descriptions are contained in the respective main articles, so here is only a brief overview:

Oldest bank today: Banca Monte dei Paschi di Siena

In terms of historical development, banks have a large lead over savings banks and credit unions. The origins of banking are rooted in the emergence of money as a means of payment, which money changers exchanged for the respective regionally valid coins. The history of the credit institute or credit can be traced back to the origin of the money, because already with natural money up to 6000 BC. Lending business came about, for example with shells or stones.

This development resulted from the so-called natural exchange economy. The earliest forerunner of modern banking is said to have been in Mesopotamia in the second century BC. Have given. In the 7th century BC The first coins were put into circulation in the form of pieces of metal made of precious metals, thus replacing barter with natural products. This development took place around the same time in Lydia and Greece . At that time, the Greeks were already conducting their first money exchange and lending transactions with coins, for example in the form of a sea loan. The coinage was further advanced and expanded by the Romans. There was a first financial crisis due to the uprisings of the Teutons , which threatened the existence of coins. After that, the respective rulers were responsible for minting the coins, so that the minting rights were dispersed. As early as the 8th century, the first monetary union of Pippin the Younger in Europe restricted fraudsters and counterfeiters in their craft by banning private coinage, which was now the responsibility of the state. His son Charlemagne finally caused the currencies to be standardized. The first paper money was introduced in China as early as the 10th century , but only over five centuries later in Europe. After initial skepticism among the population, especially with regard to the value of paper bills that were compared to coins made of (precious) metals, these innovations in their entirety contributed to the fact that lending business was further boosted. In addition, the numerous different currencies in Europe had to be converted again and again in the Middle Ages so that a trade could take place. This laid the foundation for the development of the first banking system. In Europe, banking activities, starting from the northern Italian city-states, namely Florence , spread in the 14th century through the credit and bills of exchange related to the sale of goods. The Banca Monte dei Paschi di Siena, founded in 1472 as Monte di Pietà in Siena , is the oldest bank in the world that still exists.

Savings banks enriched the banking system more and more from the first half of the 19th century, even if the first savings banks existed as early as 1778 in Hamburg , 1786 in Oldenburg and 1796 in Kiel . They are a German invention and should offer poorer sections of the population the opportunity to save a permanent, secure and interest-bearing reserve for provision in the event of illness, for old age or other vicissitudes in life or to entrust the money that has already been accumulated as a deposit to an institution that is as secure as possible. The public-law savings banks were therefore subject to strict requirements when investing their funds in order to ensure their willingness to pay at all times , something that the free savings banks supported by ideal associations also used as a guide . The bankers or private banks of that time concentrated in the conduct of business on wealthy depositors, merchants, corporations, the church and the needs of the nobility . Until the onset of industrialization, private bankers were the most important and influential carriers of the entire credit system. The increasing capital requirements of the economy in the beginning industrial age finally led to the establishment of corporations , which concentrated on banking and stock exchange transactions and financed corporate investments as credit banks. They matured into large or regional banks. It was not until 1908 that the savings banks were given the passive check capability, which enabled them to get started with payment transactions .

Hermann Schulze-Delitzsch founded the first cooperative credit institute

Cooperative banks emerged as part of the cooperative movement from the middle of the 19th century. It was a reaction to problems that arose in early capitalism for small and medium-sized enterprises and merchants. With their principles of self-help, personal responsibility and self-administration , cooperatives tried to survive in competition or to give it new impetus. The first credit unions arose independently of one another in Germany: Hermann Schulze-Delitzsch created an "advance payment association" in Delitzsch in 1850 , while Friedrich Wilhelm Raiffeisen founded the Heddesdorf loan association in Heddesdorf in 1864 . As a result, Volksbanks mainly developed in cities and Raiffeisenbanks spread in rural areas. Of the latter, many dealt with goods transactions in addition to banking.

The German legal term credit institution can be traced back to an ordinance of August 5, 1931, which was incorporated into the “Reichsgesetz über das Kreditwesen” of December 1934, which was valid until December 31, 1961. It was a reaction to the German banking crisis that occurred in 1931 after the Great Depression of 1929 . When a new Banking Act (KWG) came into force on January 1, 1962, there was a broad legal definition for credit institutions in Section 1 of the KWG . According to this, any company that conducts at least one of the banking transactions listed in Section 1 (1) KWG is irrefutably a credit institution. Beyond the aspect of creditor protection , it is intended to ensure the macroeconomic functioning of the banking industry. With the new version of the law, a central supervisory authority in the banking sector was created at the federal level, the Federal Banking Supervisory Office . By expanding its area of ​​responsibility, the authority has been transformed into the Federal Financial Supervisory Authority . The specific legal term of the credit institution has since been used in a formally neutral and generalized manner in terms of banking supervisory law, since "bank", "savings bank" or "cooperative bank" are already special forms of credit institutions.

Legal bases


In Germany, the Banking Act is the legal basis for credit institutions. The scope of the term “credit institution” in the KWG goes far beyond the banking law applicable in all EU member states , which only refers to companies that accept deposits and grant loans as “ CRR credit institutions ” (Section 1 (3d) KWG). The competence of the ECB is limited to these institutes (Art. 4 para. 1a SSM-VO). Pursuant to Article 4 Paragraph 1d SSM-VO, the ECB is responsible for ensuring compliance with the supervisory requirements with regard to liquidity , compliance with the provisions on the restriction of large exposures and capital requirements (Art. 4 Para. 1e SSM-VO) at CRR credit institutions, since Art 2 No. 3 SSM-VO for the term credit institution points to Art. 4 Paragraph 1 No. 1 Capital Adequacy Ordinance (CRR). The direct supervision of the ECB also focuses on those credit institutions that request or receive direct support from the European Stability Mechanism (ESM) or the European Financial Stability Facility (EFSF).

The term credit institution according to Section 1 (1) KWG is therefore not congruent with the term CRR credit institution applicable in the EU member states , which has been incorporated into German law (Section 1 (3d) sentence 1 KWG). In Germany, however, this mismatch is put into perspective by the fact that credit institutions with a full license are CRR credit institutions.

It should be noted that in Germany both credit institutions and financial services institutions fall under the KWG legal term of an "institute" . “Credit institution group” is also prescribed by banking law. In § 10a KWG , the legislature understands this to mean the entirety of all credit institutions to be included in the calculation of liable equity capital and thus means the conglomerate of a superordinate credit institution with its subordinate companies. In Section 13b KWG, the group of credit institutions plays a role in the large exposure provisions.

According to Section 248 (2) of the German Civil Code ( BGB) , credit institutions may charge interest from capitalized interest ( compound interest ). This applies to credit interest in the deposit business (for example in the case of savings accounts ) and in the lending business to the debit interest . Other economic subjects (except for current accounts among merchants ) are prohibited from doing this.

Austria and Switzerland

The German universal banking system and the generalized term credit institute are also known in Austria and Switzerland.


In France, the Conseil national de la Résistance introduced a segregated banking system in 1944 , which was terminated in 1984.

Anglo-Saxon countries

In the Anglo-Saxon countries the term “banks” or “savings banks” is generally used because the different variants of the German credit institutions within the three-pillar model are largely unknown. As a legal term in the Anglo-Saxon area, “credit institution” is used. According to this, it concerns companies that accept deposits or other funds from the public and grant loans for their own account.

United States

In the United States which applied from 1933 to 1999 two-tier banking system , which between investment banks (English investment banks ) and commercial banks (English commercial banks ) differed. The approach to the German banking system took place in the American banking system thanks to the extensive repeal of the separation banking regulation by the Gramm-Leach-Bliley Act of November 1999 and the fact that all large investment banks were either taken over by universal banks in the context of the financial crisis from 2007 or their status was granted a universal bank changed.


  • Jürgen Krumnow (Editor): Gabler Bank Lexicon . Wiesbaden 2002, ISBN 3-409-46116-7 .
  • Gabler Wirtschaftslexikon , 15th edition, Wiesbaden 2000, ISBN 3-409-30388-X .
  • Hans E. Büschgen; Christoph J. Börner: banking management apprenticeship . Stuttgart 2003, ISBN 3-8252-0917-2 .
  • Willi Richard, Jürgen Mühlmeyer: Management of the banks and savings banks . Rinteln 2009, ISBN 978-3-8120-0130-4 .
  • Gregor Wurm, Bernd Ettmann, Karl Wolff: Compact knowledge of banking management . Troisdorf 2008, ISBN 978-3-8237-0921-3 .

Individual evidence

  1. ^ Karl Zetsche: Small banking management apprenticeship . 17th edition. Bad Homburg vd Höhe 1964.
  2. Ulrich van Suntum: From the shell to the paper. Frankfurter Allgemeine Zeitung , November 9, 2010, accessed on February 11, 2017 .
  3. Exchange economy: natural exchange economy. Federal Agency for Civic Education , accessed on February 11, 2017 .
  4. Ulli Kulke: The Greeks invented credit - with 36 percent. , June 29, 2011, accessed on February 11, 2017 .
  5. Coralie Boeykens: Paper Money, a Chinese Invention? , accessed on February 11, 2017 .
  6. Beate Finis, Rudolf Eppler: Economic and non-economic motivations of medium-sized cooperative pioneers in the agricultural sector . 1980, p. 136 ( limited preview in Google Book search).
  7. Regulation (EU) No. 1024/2013 of the Council of October 15, 2013 , accessed on February 11, 2017 . P. 12.
  8. ^ German Bundestag: draft law of the federal government. (PDF) Printed matter 18/2575. September 22, 2014, p. 196 , accessed February 11, 2017 .
  9. ^ Friedrich Schlimbach: Short sales . 2015, p. 141 ( limited preview in Google Book search).
  10. Dominique Plihon: In: Le Monde diplomatique . March 2013, p. 11.
  11. FSA manual : “undertaking whose business is to receive deposits or other repayable funds from the public and to grant credits for its own account”.