Commercial banks, which account for the largest percentage of
the volume of banking business, engage in most types of bank-
They grant short-term loans, lines of credit, and
medium and long-term loans; they also place issues and trade
in securities for customers and for their own account. They are
also allowed to own shares and participations in other industries.
The range of services offered by banks is becoming increasingly
diversifed and includes activities such as online banking and
Moreover, the number of direct banks with
no branch network has been increasing.
Savings and loan banks (Sparkassen) are mostly municipal and
regional banks. They are coordinated through central institutions
and serve as regional clearing houses. Savings and loan banks
are also engaged in commercial banking activities.
Credit cooperatives for trade (Volksbanken) and for agriculture
(Raiffeisenkassen) generally extend lines of credit and long-term
loans to their members – typically smaller businesses – but also
Regional and federal central institutions serve as
clearing houses and sources of refinancing.
Mortgage banks (Hypothekenbanken) specialize in long-term
mortgage loans and long-term loans to federal, state, and local
governments. They issue bonds secured by mortgage loans and
loans to public authorities.
In addition, a number of private and public banks provide highly
specialized services and special forms of financing. Insurance
banks and leasing companies also play an important role in the
financing of industrial business.