The Third And Last Pillar Of The German Banking System Essay

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Commercial Banks The third and last pillar of the German banking system consists of commercial banks also known in the third pillar as the market discipline. The third pillar gives out more public disclosure and reporting requirements, compared to the other two pillars, with its increased transparency. The amount of this increased disclosure is for giving the public and also the global market a more comprehensible vision of where the bank stands in terms of risk. (Feig) With Universal banks being the more common type, responsible for about 75 % of all transactions carried out in the banking sector, these banks offer a greater amount of financial services and are more varied than services of the specialized banks. These commercial banks offer typical banking services such as setting up and watching over clients checking and savings accounts, process their payments, lending money to clients, and as well as issuing bonds to clients. As of today, there lies roughly about 300 private banks all throughout Germany. It was only until the crisis in 2008 where five major banks used to dominate the whole entire private sector. These five banks were Hypovereinsbank, Deutsche Postbank AG, Deutsche Bank, Commerzbank, and Dresdner Bank. Those five banks are more internationalized than any other banks in the private sector that primarily focus on business clients and the markets fluctuation activities. (Hassan) During the crisis in 2008, the bigger banks that Germany came to rely

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