Staatsbank
Encyclopedia
The State Bank of the GDR (German: Staatsbank der DDR) was the central bank
of East Germany. It was established on 1 January 1968 from the Deutsche Notenbank and took over the majority of the same tasks.
The State Bank of the G.D.R. was responsible for the administration of the internal account settlement and banking system, the issue of money and control of money circulation within the G.D.R., administration of the exchange control regulations and settlement of foreign currency account
s with overseas companies and governments (Zahlungsverkehr by transfer). In addition, the bank bought and sold financial securities and administered the purchase, sale and holding of precious metals for foreign exchange purposes.
The state bank was also responsible for the account processing of the state institutions and state enterprises, (Volkseigener Betrieb
), having at least one main branch in each of the 15 administrative subdivisions of the German Democratic Republic.
within the G.D.R. This was primarily because of concerns that the circulation of foreign exchange
(particularly the Deutschmark) could lead to the establishment of a parallel currency that would encourage the black market, damage the East German Mark
and the internal economy]], and undermine the international prestige of the G.D.R. on its own soil.
Thus citizens of the GDR who were in the possession of foreign exchange
(typically Deutschmarks sent by Western relatives or, for a small minority such as writers and artists, overseas commission earnings) were obliged to deposit this in a dedicated foreign exchange
account with the state bank. In order to encourage compliance, and thereby help “drain” the circulation of foreign currency from the economy, these accounts carried a 1% interest rate
premium over the nationally determined fixed interest
of 3.25% per annum paid on all other consumer saving accounts.
However, although the interest rate
on these accounts was 4.25% per annum, access to the hard currency
in the account was far from easy. Technically the foreign currency on deposit was only available for use during authorised travel to Western countries, and was limited to the legitimate foreign currency travel expenses in the country concerned, plus the equivalent of 15.00 Deutschmarks per day for other expenses. As the G.D.R. only granted visas
to travel to the West in limited circumstances to those below pensionable age (e.g. for weddings, funerals and serious illness of close relatives, business based attendance at international conferences and trade fairs), and then usually only for very short periods, this effectively “neutralised” the foreign exchange held in the accounts of all those under 65 years old and limited the usefulness of larger sums to those aged 65 and older.
, the State Bank allowed hard currency to be exchanged for Forum check
s – a form of internal currency that (crucially) could be spent at an Intershop
. These were a chain of special shops that offered high quality East German goods (that were otherwise difficult to obtain without joining a long waiting list) at reasonable prices and otherwise unobtainable Western consumer goods (usually at near Duty free price levels) – they were accessible only to foreign tourists with hard currency
and East German citizens with Forum check
s. Forum Checks were purchased at the unrealistic rate of 1 East German Mark
for 1 Deutschmark – the typical black market exchange rate
varied from 5 – 10 East German Mark
s to the Deutschmark.
In addition, it was also possible for holders of a foreign exchange
account to order from the hard currency
mail order GENEX catalog (GENEX gift service GmbH). This had originally been established to allow Westerners to legitimately send Eastern relatives Western brand (and export quality Eastern) consumer goods, wines, jewellery, delicacies etc. in exchange for hard currency
. When used by the holder of a foreign exchange
account for such an “internal” GENEX purchase, the cost of the order was debited directly from the account by Giro
or Cheque Clearing
methods.
and formalised the practice of the Bank’s president
being a member of the Council of Ministers. While this stood in stark contrast to the political independence of West Germany
’s Bundesbank it was common during this era for there to be political control over the nation’s Central Bank
-–though not usually to the extent found in East Germany and the other Eastern Bloc
economies, where the polices and technical operation of the Central Bank
were completely subservient to policies of the governing Socialist Unity Party of Germany
.
The State Bank of the GDR was also a member of the International Bank for Economic Co-operation, a Comecon
organisation founded in 1957 with its headquarters in Moscow
. The nominal currencies used for trading, international clearing and settlement purposes by this organisation were transfer roubles and gold reserves.
the bank was privatised
by Treuhand
and parts of other banks were taken over (see also Deutsche Kreditbank).
building of 1889 at the Bebelplatz
, in which the State Bank resided, was until 1945 the head office of the Dresdner Bank. After unsuccessful attempts at restitution
following German re-unification, the Dresdner Bank
built its Berlin
headquarters in Pariser Platz. The new owner of the original building was determined to be a subsidiary of Commerzbank.
After 1990 the building had mixed fortunes functioning as a local branch of the Dresdner Bank, (and featured in the film Run Lola Run
). In 2004 it was converted as part of the real estate project OpernCarrée by the hotelier Sir Rocco Forte
into a luxury hotel (the Hotel de Rome). The hotel opened on 12 October 2006.
Retrieved from "http://en.wikipedia.org/wiki/Staatsbank"
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
of East Germany. It was established on 1 January 1968 from the Deutsche Notenbank and took over the majority of the same tasks.
The State Bank of the G.D.R. was responsible for the administration of the internal account settlement and banking system, the issue of money and control of money circulation within the G.D.R., administration of the exchange control regulations and settlement of foreign currency account
Foreign currency account
Foreign Currency Account is a transactional account denominated in a currency other than the home currency and can be maintained by a bank in the home country or a bank in another country ....
s with overseas companies and governments (Zahlungsverkehr by transfer). In addition, the bank bought and sold financial securities and administered the purchase, sale and holding of precious metals for foreign exchange purposes.
The state bank was also responsible for the account processing of the state institutions and state enterprises, (Volkseigener Betrieb
Volkseigener Betrieb
The Volkseigener Betrieb was the legal form of industrial enterprise in East Germany...
), having at least one main branch in each of the 15 administrative subdivisions of the German Democratic Republic.
The internal foreign exchange rate regime
Another key task of the State Bank (on which it expended considerable resources) was attempting to control the circulation of foreign exchangeForeign exchange reserves
Foreign-exchange reserves in a strict sense are 'only' the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, Special Drawing Rights and International Monetary Fund reserve positions...
within the G.D.R. This was primarily because of concerns that the circulation of foreign exchange
Foreign exchange reserves
Foreign-exchange reserves in a strict sense are 'only' the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, Special Drawing Rights and International Monetary Fund reserve positions...
(particularly the Deutschmark) could lead to the establishment of a parallel currency that would encourage the black market, damage the East German Mark
East German mark
The East German mark commonly called the eastern mark , in East Germany only Mark, was the currency of the German Democratic Republic . Its ISO 4217 currency code was DDM...
and the internal economy]], and undermine the international prestige of the G.D.R. on its own soil.
Thus citizens of the GDR who were in the possession of foreign exchange
Foreign exchange reserves
Foreign-exchange reserves in a strict sense are 'only' the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, Special Drawing Rights and International Monetary Fund reserve positions...
(typically Deutschmarks sent by Western relatives or, for a small minority such as writers and artists, overseas commission earnings) were obliged to deposit this in a dedicated foreign exchange
Foreign exchange market
The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...
account with the state bank. In order to encourage compliance, and thereby help “drain” the circulation of foreign currency from the economy, these accounts carried a 1% interest rate
Interest rate
An interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. For example, a small company borrows capital from a bank to buy new assets for their business, and in return the lender receives interest at a predetermined interest rate for...
premium over the nationally determined fixed interest
Interest
Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....
of 3.25% per annum paid on all other consumer saving accounts.
However, although the interest rate
Interest rate
An interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. For example, a small company borrows capital from a bank to buy new assets for their business, and in return the lender receives interest at a predetermined interest rate for...
on these accounts was 4.25% per annum, access to the hard currency
Hard currency
Hard currency , in economics, refers to a globally traded currency that is expected to serve as a reliable and stable store of value...
in the account was far from easy. Technically the foreign currency on deposit was only available for use during authorised travel to Western countries, and was limited to the legitimate foreign currency travel expenses in the country concerned, plus the equivalent of 15.00 Deutschmarks per day for other expenses. As the G.D.R. only granted visas
Visa (document)
A visa is a document showing that a person is authorized to enter the territory for which it was issued, subject to permission of an immigration official at the time of actual entry. The authorization may be a document, but more commonly it is a stamp endorsed in the applicant's passport...
to travel to the West in limited circumstances to those below pensionable age (e.g. for weddings, funerals and serious illness of close relatives, business based attendance at international conferences and trade fairs), and then usually only for very short periods, this effectively “neutralised” the foreign exchange held in the accounts of all those under 65 years old and limited the usefulness of larger sums to those aged 65 and older.
Forum checks, Intershops and Genex
In order to overcome this obvious disincentive to compliance with the internal foreign exchange rate regimeExchange rate regime
The exchange-rate regime is the way a country manages its currency in relation to other currencies and the foreign exchange market. It is closely related to monetary policy and the two are generally dependent on many of the same factors....
, the State Bank allowed hard currency to be exchanged for Forum check
Forum check
Forum checks were a form of hard currency in East Germany. By law all East Germans had to convert immediately any Deutsche Marks they possessed into Forum checks at the state bank since 1979. A Forum check mark was worth 1 Deutsche Mark...
s – a form of internal currency that (crucially) could be spent at an Intershop
Intershop
Intershop was a chain of government-run retail stores in the German Democratic Republic in which only hard currencies could be used to purchase high-quality goods. The East German mark was not accepted as payment...
. These were a chain of special shops that offered high quality East German goods (that were otherwise difficult to obtain without joining a long waiting list) at reasonable prices and otherwise unobtainable Western consumer goods (usually at near Duty free price levels) – they were accessible only to foreign tourists with hard currency
Hard currency
Hard currency , in economics, refers to a globally traded currency that is expected to serve as a reliable and stable store of value...
and East German citizens with Forum check
Forum check
Forum checks were a form of hard currency in East Germany. By law all East Germans had to convert immediately any Deutsche Marks they possessed into Forum checks at the state bank since 1979. A Forum check mark was worth 1 Deutsche Mark...
s. Forum Checks were purchased at the unrealistic rate of 1 East German Mark
East German mark
The East German mark commonly called the eastern mark , in East Germany only Mark, was the currency of the German Democratic Republic . Its ISO 4217 currency code was DDM...
for 1 Deutschmark – the typical black market exchange rate
Exchange rate
In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency...
varied from 5 – 10 East German Mark
East German mark
The East German mark commonly called the eastern mark , in East Germany only Mark, was the currency of the German Democratic Republic . Its ISO 4217 currency code was DDM...
s to the Deutschmark.
In addition, it was also possible for holders of a foreign exchange
Foreign exchange reserves
Foreign-exchange reserves in a strict sense are 'only' the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, Special Drawing Rights and International Monetary Fund reserve positions...
account to order from the hard currency
Hard currency
Hard currency , in economics, refers to a globally traded currency that is expected to serve as a reliable and stable store of value...
mail order GENEX catalog (GENEX gift service GmbH). This had originally been established to allow Westerners to legitimately send Eastern relatives Western brand (and export quality Eastern) consumer goods, wines, jewellery, delicacies etc. in exchange for hard currency
Hard currency
Hard currency , in economics, refers to a globally traded currency that is expected to serve as a reliable and stable store of value...
. When used by the holder of a foreign exchange
Foreign exchange reserves
Foreign-exchange reserves in a strict sense are 'only' the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, Special Drawing Rights and International Monetary Fund reserve positions...
account for such an “internal” GENEX purchase, the cost of the order was debited directly from the account by Giro
Giro
A Giro or giro transfer is a payment transfer from one bank account to another bank account and instigated by the payer, not the payee...
or Cheque Clearing
Clearing (finance)
In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled. Clearing is necessary because the speed of trades is much faster than the cycle time for completing the underlying transaction....
methods.
Political control of the State Bank
Although the State Bank was always politically subordinate to the G.D.R. government, this was made explicit by a law of 19 December 1974 which defined the State Bank as an organ of the Council of Ministers of the German Democratic RepublicGerman Democratic Republic
The German Democratic Republic , informally called East Germany by West Germany and other countries, was a socialist state established in 1949 in the Soviet zone of occupied Germany, including East Berlin of the Allied-occupied capital city...
and formalised the practice of the Bank’s president
President
A president is a leader of an organization, company, trade union, university, or country.Etymologically, a president is one who presides, who sits in leadership...
being a member of the Council of Ministers. While this stood in stark contrast to the political independence of West Germany
West Germany
West Germany is the common English, but not official, name for the Federal Republic of Germany or FRG in the period between its creation in May 1949 to German reunification on 3 October 1990....
’s Bundesbank it was common during this era for there to be political control over the nation’s Central Bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
-–though not usually to the extent found in East Germany and the other Eastern Bloc
Eastern bloc
The term Eastern Bloc or Communist Bloc refers to the former communist states of Eastern and Central Europe, generally the Soviet Union and the countries of the Warsaw Pact...
economies, where the polices and technical operation of the Central Bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
were completely subservient to policies of the governing Socialist Unity Party of Germany
Socialist Unity Party of Germany
The Socialist Unity Party of Germany was the governing party of the German Democratic Republic from its formation on 7 October 1949 until the elections of March 1990. The SED was a communist political party with a Marxist-Leninist ideology...
.
The State Bank of the GDR was also a member of the International Bank for Economic Co-operation, a Comecon
Comecon
The Council for Mutual Economic Assistance , 1949–1991, was an economic organisation under hegemony of Soviet Union comprising the countries of the Eastern Bloc along with a number of communist states elsewhere in the world...
organisation founded in 1957 with its headquarters in Moscow
Moscow
Moscow is the capital, the most populous city, and the most populous federal subject of Russia. The city is a major political, economic, cultural, scientific, religious, financial, educational, and transportation centre of Russia and the continent...
. The nominal currencies used for trading, international clearing and settlement purposes by this organisation were transfer roubles and gold reserves.
Post reunification
After German reunificationGerman reunification
German reunification was the process in 1990 in which the German Democratic Republic joined the Federal Republic of Germany , and when Berlin reunited into a single city, as provided by its then Grundgesetz constitution Article 23. The start of this process is commonly referred by Germans as die...
the bank was privatised
Privately held company
A privately held company or close corporation is a business company owned either by non-governmental organizations or by a relatively small number of shareholders or company members which does not offer or trade its company stock to the general public on the stock market exchanges, but rather the...
by Treuhand
Treuhand
The Treuhandanstalt was the agency that privatized the East German enterprises, Volkseigener Betrieb , owned as public property. Created by the Volkskammer on June 17, 1990, it oversaw the restructuring and selling of about 8,500 firms with initially over 4 million employees...
and parts of other banks were taken over (see also Deutsche Kreditbank).
Accommodation
The protected neo-classicalNeoclassical architecture
Neoclassical architecture was an architectural style produced by the neoclassical movement that began in the mid-18th century, manifested both in its details as a reaction against the Rococo style of naturalistic ornament, and in its architectural formulas as an outgrowth of some classicizing...
building of 1889 at the Bebelplatz
Bebelplatz
The Bebelplatz is a public square in the central Mitte district of Berlin, the capital of Germany.The square is located on the south side of the Unter den Linden boulevard, a major east-west thoroughfare in the city centre...
, in which the State Bank resided, was until 1945 the head office of the Dresdner Bank. After unsuccessful attempts at restitution
Restitution
The law of restitution is the law of gains-based recovery. It is to be contrasted with the law of compensation, which is the law of loss-based recovery. Obligations to make restitution and obligations to pay compensation are each a type of legal response to events in the real world. When a court...
following German re-unification, the Dresdner Bank
Dresdner Bank
Dresdner Bank AG was one of Germany's largest banking corporations and was based in Frankfurt. It was acquired by competitor Commerzbank in December 2009.- 19th century :...
built its Berlin
Berlin
Berlin is the capital city of Germany and is one of the 16 states of Germany. With a population of 3.45 million people, Berlin is Germany's largest city. It is the second most populous city proper and the seventh most populous urban area in the European Union...
headquarters in Pariser Platz. The new owner of the original building was determined to be a subsidiary of Commerzbank.
After 1990 the building had mixed fortunes functioning as a local branch of the Dresdner Bank, (and featured in the film Run Lola Run
Run Lola Run
Run Lola Run is a 1998 German crime thriller film written and directed by Tom Tykwer and starring Franka Potente as Lola and Moritz Bleibtreu as Manni. The story follows a woman who needs to obtain 100,000 German marks in 20 minutes to save her boyfriend's life...
). In 2004 it was converted as part of the real estate project OpernCarrée by the hotelier Sir Rocco Forte
Rocco Forte
Sir Rocco Forte is a British hotelier born in Bournemouth.After Downside School he went on to read modern languages at Pembroke College, Oxford, where he won a blue for fencing...
into a luxury hotel (the Hotel de Rome). The hotel opened on 12 October 2006.
Retrieved from "http://en.wikipedia.org/wiki/Staatsbank"
Presidents of the bank
- Greta Kuckhoff (1950-1958)
- Martin Schmidt (1958-1961)
- Rolf Wetzel (1961-1964)
- Helmut Dietrich (1964-1967)
- Margarete Wittkowski (1967-1974)
- Horst Kaminsky (1974-1990)