Germany is Europe’s largest economy and consumer market with a population of 82 million. Situated at the heart of a 27-member European Union, Germany has become an attractive and important business location for both domestic companies and over 35,000 foreign businesses that maintain operations in the country.
As a member of the Eurozone, many aspects of banking and cash management in Germany are becoming increasingly standardised and harmonised with other countries in Europe, not least through the implementation of the Single Euro Payments Area (SEPA), which was launched earlier this year.
Yet the German banking and cash management market maintains many unique features. Germany’s banking sector is quite distinctive, comprising over 2,000 banks, many of them publicly-owned savings banks or private co-operative banking institutions. Private commercial banks, for example, have only a third of the market in terms of total bank assets. As a result the German market for payments and cash management is highly competitive. Payment systems and payment instruments in Germany generally operate at a high level of reliability and efficiency.
In the first edition of this handbook, we intend to provide an insight into the German banking and payments market, and illustrate the cash management techniques that are available in Germany today. In addition, we highlight the main characteristics of the tax and legal regime that have to be considered when managing cash and specifically when integrating German entities into a domestic or cross-border cash pool.
The majority of companies, irrespective of their size, banking relationships and cash management will often have an element of internationalisation. As a result, cash management facilities and arrangements in Germany cannot be evaluated in isolation. It may therefore be of additional benefit to read this report alongside Treasury Today’s handbook ‘European Cash Management’, which provides more detailed information on SEPA, European payment systems, cash pooling structures and how to select the right cash management provider and the best cash management solution.
Includes: