International Country study of Germany - Essay Example

There are certain exceptions, like the specific sectors of agriculture and coal mining, which are regulated and specially subsidized. The gross domestic product of Germany (purchasing power parity) in 2008 was $2.863 trillion (CIA, World Factbook, 2009), with the official currency being the euro. In order to seriously comprehend the economic framework within which Germany functions, it is imperative to be cognizant of the basic features and structural facets of the banking and the financial system of Germany.

The banking network in the country of Germany comprises of different private and public credit institutions (Banks and Banking, n.d.). Though the types of activities that are allowed to each variety of the credit institutions are not bounded, yet specific distinctions in the characteristic range of bank customers or transactions do prominently exist (Baums and Gruson, 1993, p.4). The variegated credit institutions in Germany are – (1) commercial banks that come under the private sector (private Geschaftsbanken); (2) banks that exclusively deal in savings (Sparkssen) and related credit operations with their central institutions (Landesbanken und Girozentralen); and, (3) the agricultural and the industrial credit co-operatives (Raiffeiseibanken and Volksbanken), the regional institutions of these banks (Genossenschaftliche Zentralbanken), and their strong central institution (Deustche Genossenschaftsbank ) (Baums and Gruson, 1993, p.4). The savings banks which had previously solely focused on the amount of savings deposits and the long term loans, have diversified their activities a more prolific manner, and with their central institutions which is the regional Landesbank, are functional in spheres of lending in large scale, financing in the industrial sector, and mobilizing capital in the securities business.

With a parallel context, the club of commercial banks has penetrated the field of