1 March 1948

Bank deutscher Länder established through laws enacted by the Allied military government as central institution of the West German central banking system. Objective: to stabilise the currency and the monetary and credit system. Independent of German political authorities, from 1951 also independent of Allied occupying forces.

21 June 1948

Currency reform in West Germany. D-Mark replaces the Reichsmark under laws enacted by the Allied military government. General exchange rate: Reichsmark (RM) 100 = DM 10. Exchange rate for major holdings of cash and credit balances with banks/savings (4 October 1948): RM 100 = DM 6.50.

19 September 1950

European Payments Union established (with retroactive effect from 1 July 1950). Multilateral payment and credit system of the OEEC countries. Objectives: currency convertibility, trade liberalisation and European integration.

14 August 1952

Federal Republic joins International Monetary Fund. Subsequently participates in Bretton Woods system of fixed (but adjustable) exchange rates.

26 July 1957

Bundesbank Act. On 1 August 1957, the Deutsche Bundesbank replaces the Bank deutscher Länder. Objective: to safeguard the currency and to arrange for the execution of payments. Independent of instructions from the government. Compared with the Bank deutscher Länder, a more centralised composition of the most senior monetary policy decision-making body, the Central Bank Council. – Responsible for defining the exchange rate regime and for modifying the exchange rates in the fixed exchange rate system at Federal Government level.

27 December 1958

Majority of European currencies declared convertible. D-Mark freely exchangeable against other currencies for residents and non-residents. End of European Payments Union.

10 July 1961

Banking Act. Ongoing monitoring of banks by the Bundesbank. Regulations on own funds and bank’s liquidity with the involvement of the Bundesbank.

12 March 1973

Bretton Woods system of fixed exchange rates collapses: at a meeting of the EC Council of Ministers in Brussels, several member states, including Germany, decide on “block floats”, others on isolated floats, of their currency against the dollar. Start of floating: 19 March 1973.

13 March 1979

Central bank agreement on the European Monetary System as a successor to the European Exchange Rate Mechanism set up in 1972. System of fixed but adjustable exchange rates with mutual, restricted obligations for exchange rate intervention.

1 July 1990

Pan-German monetary, economic and social union. D-Mark and the Bundesbank’s responsibility for fiscal policy extended to the former GDR. Exchange rate of GDR Mark to D-Mark: 1:1 for wages, 2:1 for individual’s balances with banks (within certain limited amounts 1:1).

7 February 1992

Maastricht Treaty on European Union signed by EU member states. Envisages setting up a European economic and monetary union in several stages; accession by an EU country depends on the fulfilment of certain “convergence criteria”.

16/17 July 1997

European Stability and Growth Pact adopted by European Council. Objective: to secure stability-oriented fiscal policy even after the European Monetary Union has been established. Calls for balanced budgets in the medium term; ceiling for annual budget deficit set at 3% of gross domestic product.

1 January 1999

Stage Three of European economic and monetary ­union begins: euro becomes common currency of 11 EU countries, including Germany. Eurosystem assumes joint responsibility for monetary policy in the euro area; the President of the Deutsche Bundesbank has one vote on the Governing Council of the European Central Bank, as does every other member.

1 January 2002

Euro also introduced as cash in the euro area, where it is now the sole legal tender.

23 March 2002

Bundesbank Act amended. Executive Board is sole decision-making body of the Bundesbank. Land Central Banks no longer exist, they remain Regional Offices but without autonomy.