Dr. Massimo Luppino; Mr. Cristian Mannelli
Massimo Luppino, si è laureato con il massimo dei voti in Economia e Commercio all’Università degli Studi di Firenze, ed ha studiato alla University of Applied Sciences di Acquisgrana (Germania) e alla Boston University (Massachusetts, USA). Dopo diverse esperienze di lavoro effettuate in Italia e all’estero, da novembre 2001 collabora come autore con Magistra occupandosi di analisi e approfondimenti sul sistema bancario tedesco.
Cristian Mannelli, si diploma nel 1994 ed inizia subito a seguire le sue aspirazioni professionali. Entrato nell’azienda di famiglia, guida l’azienda verso uno sviluppo commerciale innovativo. Nel 1996 si trasferisce in Gran Bretagna dove per due anni lavora nell’ambito Consulting. Nel 1998 viene chiamato a guidare i progetti E-Commerce della Supreme Royal Courts of Justice.
The banking industry in Germany is, together with the insurance field, the most controlled and restricted branch of the economy. The strong influence and the control from the government is the result of a long process. In the 1869 the law enforced called Gewerbeordnung (in English: code of the economic activities) only regulated for determined fields the limitation to exercise economic activities. A limitation not forecasted for banks which nearly had a complete freedom to exercise their activity. Banks did not have total freedom though, as the public vigilance for certain groups goes back for many years. The vigilance on emission banks goes back to 1619, while the one on the public credit institutions to 1765. From 1838 surveillance exists on the savings and loans companies and from 1896 control on the stocks market. The idea of a general vigilance for banks though was never realized as the principle of the economic freedom was too strong.
The banking crises of 1901 and of the period 1906/07 renewed the argument on the necessity of a greater regulation for the banking industry, but an appropriate general vigilance was realized only in 1931.
In reaction to the banking crisis of 1931 on 19th September was emitted an emergency regulations which introduced in Germany a system of common vigilance to all the banks. Such regulations established not only the necessary requirements for the establishment of a banking activity but also some points regarding the bank’s operativity. This new function was entrusted to the Reichsbank.
Through the Kreditwesengesetz of 25th September 1934 the banking vigilance was entrusted to the Reichsaufsichtsamt für das Kreditwesen (in English: Agency of vigilance for the Reich on the credit system) an organ appertaining to the Ministry of the Economy of the Reich. As far as material-practical aspects of the vigilance it was forecasted that the offices of the Reichsbank would have been use for such scope. Due to the modification of 18th September 1944, functions and primary powers of the vigilance were completely transferred to the Ministry of the Economy of the Reich.
After the end of II World War the system of banking vigilance (as it happened for many other institutions) was decentred for order of the Allies and entrusted to the Länder.
The Länder at first were supported by the central offices of the Reichsbank and subsequently to the regional central banks. The Landeszentralbanken (in English: central banks of the Länder). In order to assure the coordination between them the Länderrat des Vereinigten Wirtschaftsgebiets established in 1948 “an extraordinary committee for the banking vigilance”, which was composed by representatives of the ministries of the Länder and of the relevant federal ministries in substitution of the Bundesbank.
After a decade of preparation, the Kreditwesengesetz (KWG) was established on 1st January 1962. This law has the aim to guarantee general order in the financial system and to entrust functionality and financial stability in the field. It constitutes still today the legal principal of the vigilance system on the German banking system even if during the course of years it has been modified several times.
The supervision on the banking institution in Germany is fundamentally centralised even if powers and functions are subdivided between more agencies that closely collaborate between them.
The vigilance on the banking system is entrusted by the Bundesaufsichtsamt für das Kreditwesen (BAK) which enjoy the support of the Deutsche Bundesbank. Even the central banks of the Länder, which could be improperly compared to simple branches of the Bundesbank, cover an important role for the practical and executive’s aspects of the vigilance.
From an institutional point of view the Bundesaufsichtsamt für das Kreditwesen is the most important authority for banking vigilance. The federal BAK is subordinate to the direct control of the Federal Ministry of Finances. On top of the hierarchy of the BAK seats a president named from the President of the Republic on proposal of the Federal Government after having listened the Bundesbank. The Bundesbank has only the right to express its position but cannot refuse the decision.
The BAK has been instituted on 1st January 1962 and was based in Berlin. Later, due to the transfer of the Federal Government from Bonn to Berlin, the BAK was transferred from Berlin to Bonn.
The law recognizes to the BAK a primary position on vigilance activity and the division of the functions between the BAK and Bundesbank are clearly defined:
· The primary functions are entrusted by the BAK.
· The BAK can emanate new directive which although must be agreed in accordance with the Bundesbank.
Accordingly to the grade, of which these rules are drawn from functions of the Bundesbank, is determined the degree of participation of this:
· The BAK must listen and hold in account the position of the Bundesbank, before being able to raise the institutes subjected to its vigilance from the duty to introduce the denunciations and the summary forecasted from the enforced norms.
· The BAK needs the approval of the Bundesbank in relation to the regarding dispositions of major credits.
· The directives regarding the net worth equipment and liquidity must be adopted for common agreement between BAK and Bundesbank.
The banking and financial activities listed from the Kreditwesengesetz, the main German banking law, can only be carried out with the expressed authorization of the BAK.
The BAK is not only limited by granting or withdrawing authorisation to exercise banking activities. The BAK controls that the institutes subordinates to its vigilance respect the concerning dispositions accordingly to the capitalisation and on the degree of liquidity, and control the risks deriving from the operations. They try to prevent that the banks put in danger the system by using their funds and the public one for high risk operations. With the aim to fulfil a continuous vigilance the BAK examines the variety of data and information received from all institutes like the budgets and the reports of the auditors. In particular the institutes must deliver every month to the Bundesbank a written report regarding the modalities of the enforced dispositions. The Bundesbank after having examined the reports it transmits their comment to the head of the BAK. A bank appertaining to a group must issue not only a report on their own situation but also a descriptive report on the situation of the group. The controls through these reports supplied by the institutes itself are based on the trust that the data supplied are trustworthy. That is why there are special requirements that must be followed by the independent accountants when drawing up the reports. Both BAK and Bundesbank do not have their own auditors in order to have transparency on the management of the activities as the book keeping which can be verified by all institutes. The institutes that belong to the category of the savings and loan companies or the cooperatives banks are subordinates to the control of accountancy firms appertaining to the same category. The BAK has however the faculty to undertake controls and inspections even without a reason in order to act.
Through the analysis of the data in disposal, the BAK can monitor the managing and the economical situation of the supervised institutes. The BAK can arrange the necessary measures of protection for thirds party when banks cannot face their obligation with their creditors. If the institute as a low cash flow or is in over-debts the BAK can temporary order the closing of the activity until it is not clear if the crisis can be passed or if it is necessary to start a procedure for bankruptcy. The BAK becomes operative when the management of an institute subordinate to its vigilance present such deficiencies to danger the received sums or if it is not capable to assure an appropriate execution of its own activity.
The BAK can obtain the respect and implementation of action emitted to stable the market even with institute of public right. If the body discover in a bank or another financial institution an action or punishable omission accordantly to the dispositions of the KWG (The exercise of banking transactions prohibited or performed by a not authorized persons; the exercise of banking activity or financial institution without the authorisation as prescribed by the law; lacked presentation in the budget, etc.), the BAK can punish the management or the involved agencies.
The BAK is, moreover, the body in charge of the surveillance of the respect of the various laws regarding the special credit institutes like the respect of the Hypothekenbankgesetz (in English: law on the mortgage banks), Schiffsbankgesetz (in English: law on the marine credit banks), Bausparkassengesetz (in English: law on the savings and loan companies buildings) and Kapitalanlagegesellschaftsgesetz (in English: law on the investment trusts). The vigilance on the investment trusts is practise on the surveillance of the respect of the norms to guarantee the solvency and on the vigilance of the funds managed by such societies. The BAK authorizes, in particular, the general contract conditions and examines the relative informative prospects of the managed funds.
Since 1993 the BAK has been involved in the fight against money laundry from illegal activities and control the respect of the dispositions in the Geldwäschegesetz (in English: prevent money laundering law).
For the public credit institutions with special assignments (Kreditanstalt für Wiederaufbau, etc….) it has remained enforced, even after the reform of 1961, the presents of an extraordinary vigilance aside the one of the BAK. An extraordinary vigilance was established and it is still enforced for determined central institutes of category, such as the Deutsche Girozentrale, Deutsche Kommunalbank and the Deutsche Genossenschaftsbank. For such institutes the vigilance is exercised directly from the Federal Government or its federal ministries. Even the regional banks and the operating savings and loan companies in the shape of an agencies of an institution of public right are subordinates to the vigilance of the authorities previewed from the regional laws of the Land in which they have the head office.
Since 1st January 1995 the BAK collaborates with the Bundesaufsichtsamt für den Wertpapierhandel (in English: Federal inspectorate on the financial intermediation). Since the Wertpapierhandelgesetz (in English: law on the financial intermediation) was established. This Federal Agency watches the operations of the banking and not banking financial intermediaries having for object the negotiation of financial products and derivates (options, futures, etc.). Main task of the Bundesaufsichtsamt für den Wertpapierhandel (BAWe) is the one to guarantee the functionality of the German intermediation markets. In relation to this it is up to the BAWe to prevent and to pursue the illegal exploitation of insider-information.
The last organ that carries out vigilance functions is the Federal Government. In the case of a crisis of the entire banking system, capable to forecast enormous effects on the entire economy, only the Federal Government can decide, by means of executive regulations, the suspension of the banking activities and the dealings on the Stock Exchange.
The German Government has officially introduced in date 11th April 2001 the bill with which intends to create a single authority of surveillance for the financial field: the Bundesanstalt für Finanzdienstleistungen und Finanzmarktaufsicht (in English: The Federal agency for the financial services and the surveillance of the financial markets).
This new agency will go to group the activities, up to now separated, of the Bundesaufsichtsamt für das Kreditwesen, Bundesaufsichtsamt für das Versicherungswesen (the authority of vigilance for the insurances agencies) and Bundesaufsichtsamt für den Wertpapierhandel. Even after the introduction of this new reform, for many aspects to be considered historical, the Bundesbank will be placed side by side to the new authority for the activities of surveillance of the banking system.
This new authority will be constituted as a public company and it will be subdivided in three departments. At every department will be entrusted the functions of the three authorities in function today. The institute will be directed by a president, helped on the respects of their own functions from four vice presidents: one assigned to the coordination between the three departments and the others three placed as head of each department.
It has been the recent acquisition of the third German bank, the Dresdner Bank, from the insurance giant Allianz, that has strengthened the need of a structure based on the model of the Financial Services Authority in Great Britain.