Banking and Frankfurt

When the banking and finance sector in Europe is analyzed, it is seen that the city of Frankfurt stands out as the financial center of Germany. It is one of the most important locations for banks and financial services in continental Europe and is critical to the economic strength of the FrankfurtRheinMain region.

The number and importance of credit institutions, stock exchanges, financial intermediaries and specialist scientific institutions in Frankfurt are surpassed in Europe only by London. However, with the Brexit process, it is seen that the gap between the two cities started to close rapidly in favor of Frankfurt. In the global ranking of financial centers, New York, London, Tokyo and Frankfurt make up the top four.

Most of the financial players in Germany are concentrated in Frankfurt. While the European Central Bank (ECB), Bundesbank , German Stock Exchange and EIOPA have their headquarters in Frankfurt, there are also many venture and business development agencies. Together with neighboring universities and technical colleges, Frankfurt is developing into a highly financially competent science center.

The ECB is tasked with guaranteeing the purchasing power and price stability of the Euro, the common currency of the Eurozone. The Eurozone consists of 15 European Union countries that have introduced the Euro since 1999. Deutsche The Bundesbank is the central bank of the Federal Republic of Germany and is responsible for the monetary policy of the Eurosystem. Other core business areas include the financial and currency system, banking supervision, cashless payments and cash. The ECB (European Central Bank) is an institution based in Frankfurt that manages the monetary policy of the euro area. As of 2021, the total balance sheet of the ECB is around 7 trillion Euros.

The Federal Financial Supervisory Authority ( BaFin ) acts in the public interest of banks and financial service providers, insurance and securities trading. Its main objective is to guarantee a functioning, stable, honest and sustainable German financial system. EIOPA (European Insurance and Occupational Pensions Agency) is an independent insurance and occupational pensions body and advises the European Commission. Even after the financial crisis, the Frankfurt financial center has not lost any of its attractiveness.

Frankfurt is known as the financial center of Germany and many banks have their headquarters or branches here. There are approximately 200 banks and financial institutions in Frankfurt. The vast majority of these banks are private or commercial banks. The headquarters of some banks located in Frankfurt are:

• Deutsche Bank
• Commerzbank
• DZ Bank
• KfW Bankengruppe
• Helaba ( Landesbank Hesse-Thuringia )

Among international banks, banks with branches or headquarters in Frankfurt include:

• JPMorgan Chase
• Citibank
• Goldman Sachs
• Morgan Stanley
• HSBC
• Society General
• UBS
• Credits Suisse
• ING Group
• BNP Paribas

According to 2020 data, the market shares among the largest banks in Germany are as follows:

• Deutsche Bank: 5.5 %
• Commerzbank : 2.8 %
• KfW Bankengruppe : 1.8 %
• DZ Bank: 1.7%

It is known that the most popular place of business preferred by companies that are internationally active in the financial sector is the German financial center. The Banking Committee promotes awareness in the financial sector, as it recognizes that the success of the Frankfurt financial center, and thus its reputation, is linked to the German financial center. This balances all players in the Main region. It not only balances classical banks’, comprehensive financial institutions but also affects new players whose importance is increasing for the financial sector.

The recent turmoil in the financial markets has not only affected the players in the markets, but also attracted the attention of various regulatory institutions around the world. This situation has led to intense discussions on the depth of possible regulatory interventions. The main event is to implement an effective regulatory architecture. The most recent example in this regard is the European Parliament's Finance Committee's call to gather all future European financial audits in Frankfurt.

Frankfurt is a highly successful financial center competing with globally networked exchanges. Many strengths characterize this financial center. Deutsche Börse surrounds the world and is a global network that must continue to expand. This does not change its vital link with the Frankfurt financial center. On the one hand, Deutsche Börse's success gives the Frankfurt region an international reputation as well as sustainable economic stability and secure jobs. On the other hand, Deutsche Börse will not be able to cope with the difficulties of global competition without it, because it draws strength from this region.

Besides financial capital, human capital also plays a decisive role in the competition between metropolises. House of Finance and Frankfurt School of Finance and Management form an intellectual infrastructure that can compete on equal terms with the financial centers of London and Paris. Frankfurt is synonymous with common sense. Frankfurt's financial sector, unlike other financial centers, has always maintained close ties to the real economy. This is one of the reasons why the metropolis on Main never showed waves of extremism or layoffs like other international financial centers, even at the height of the financial crisis. The actors in the Frankfurt financial center act on the belief that the most important task of a financial center is to combine long-term capital requirements with long-term investment requirements to support economic growth. Relevant actors should also continue to focus on this function.

The European Central Bank has a great role in making Frankfurt an international financial center. The establishment of the European Central Bank (ECB) gave significant impetus to which the city as a whole benefited. Frankfurt has always been a very open city and, thanks to the ECB, it has become perhaps the most European of all cities.

German SMEs are extremely popular among banks. Medium-sized businesses have been seen as a classic line of business for cooperative banks and savings banks for years. However, medium-sized companies are now at the center of the competition. Regulations, lost business models, a return to domestic markets triggered by the financial market and government debt crisis, and the strength of the German economy make this possible. In short, the return to the real economy allows banks to give small and medium-sized enterprises the attention they deserve due to their superior position in the country's economy.

Developing capital markets in terms of alternative financing sources and risk management for medium-sized large companies is an issue that has gained importance recently. The interest of companies in diversifying their investors or in alternative financing sources has been revived, especially with the developments experienced in the past crisis years. Alternative financing instruments are seen as an important option for investors who want to increase their equity or for companies looking for new investors by issuing bonds. In this context, securities, which are an interesting alternative especially for medium-sized companies and investors, are accepted as a financing tool close to the capital market.

This increasing capital market demand shows how important it is for an internationally important financial center like Frankfurt. Frankfurt is a financial center that plays a leading role worldwide and is the national champion of Germany. Around 75,000 people are employed in 260 credit institutions, including the four largest German banks and around 200 foreign banks from 40 countries.

The Frankfurt Chamber of Industry and Commerce (IHK Frankfurt) and its banking committee play an important role in the Frankfurt financial center. Because most of the major financial institutions represented here work. IHK Frankfurt and its banking committee are known for their strategies aimed at making the Frankfurt financial center the supervisory center of European financial markets. These two organizations also support the external image and marketing of the Frankfurt financial center. They collaborate on the creation of a successful trademark 'Frankfurt Main Finance' for the financial center. Not giving up is one of the decisive factors for the future of the financial center, where the priority of all established financial centers in the world, including Frankfurt, is constantly questioned. This is also demonstrated by the Global Financial Centers Index (GFCI): 24 of the 50 financial centers listed in 2007 were in Europe, compared to just 34 out of 77 in 2012. However, this is a dynamic advantage for Frankfurt, as it has emerged as a reliable and knowledgeable partner for the development of financial centers in emerging markets. Foreign investors have a clear idea of what the Frankfurt financial center has to offer.