The German Sparkassen: A Commentary and Case study - Civitas

1. Introduction
The remarkable success of the German Industrial Mittelstand in the last 60 years is directly related
to the financial and overall economic support that has been provided by the German Sparkassen.
In terms of structure, organisation, operation and definition of responsibility, seen from an Anglo-
American perspective, they are unique. They provide not just finance but are obligated by their
constitution to support the sustainable development of the total economy within their defined
geographic business area. They also have very significant social responsibilities that extend well
beyond provision of banking services.
These Savings Banks are not state banks but are essentially credit institutions operating under public
law. Their responsible public bodies (but not owners) are the local municipalities. Savings Banks
are not a consolidated group; each Savings Bank is an independent credit institution and is highly
autonomous. They, however, come under an umbrella organisation, the Deutscher Sparkassen–
und Giroverband (DSGV) that, although it can only exercise control by consent, is able to ensure
effective and efficient operation with very low risk.
In order to understand the structure and operation of the Savings Banks, it is important first to recognise
both the history and the government of the country as it currently operates. Germany has
only existed as a unified country since 1871 (previously comprising a large number of independent
states and principalities) and now has a federal structure with 16 Federal States (Länder), each
3