Deutsche Bundesbank

The Deutsche Bundesbank is the central bank of Germany within the Eurozone (a region of countries that use the Euro). The Bundesbank was the first central bank to be given control over the economy. From 1957 to 1998 it printed the Deutsche Mark.

When the European Central Bank was formed in 1998, the Bundesbank stopped being the German central bank. It also stopped printing Deutsche Marks. Germany did not get rid of the Bundesbank in 1998, but its role changed from being a central bank to helping the European Central Bank.

During the reunification of Germany, Helmut Kohl chose to allow Deutsche Marks to be exchanged for East German Marks, at a 1:1 ratio. The Bundesbank argued that this would cause inflation, and it had to change plans to stop this.https://www.internationalmonetaryfund.com/external/np/leg/sem/2002/cdmfl/eng/siklos.pdf

In the Euro area crisis, it was said that the Bundesbank could have an exposure(money that it could lose) of €644 billion. The Bundesbank is the largest shareholder of the European Central Bank. If the Euro were to fail, the Bundesbank could lose up to €200 billion. The Bundesbank asked for a tax on the people of a country before they could ask to default(agree to not pay off) on their debt (money that they need to pay back).https://www.reuters.com/article/us-eurozone-crisis-bundesbank-idUSBREA0Q0HV20140127

References

Category:Central banks
Category:Banks of Germany