Skyline Frankfurt am Main
Banking Supervision

A well functioning economy requires a stable banking system. Banking supervision is therefore responsible for monitoring credit institutions’ business activity and maintaining investor confidence. In Germany, the task of banking supervision is shared by the Bundesbank and the Federal Financial Supervisory Authority (BaFin). In particular, the Bundesbank is in charge of monitoring the credit institutions.

Bundesbank symposium 2020
A person holding a programme of the banking symposium

Unfortunately, owing to the current situation, the Bundesbank Symposium “Banking supervision in dialogue” cannot take place on 5 May 2020 as scheduled.

Results of the 2019 LSI stress test

The profitability of small and medium-sized banks and savings banks (less significant institutions, LSIs) in Germany is low. The prospect of a prolonged period of historically low interest rates makes it very likely that profitability will decrease further. This was shown by the recent survey carried out by the Deutsche Bundesbank and the Federal Financial Supervisory Authority (BaFin) on the earnings situation and the resilience of German credit institutions in the low interest rate environment.

Consolidation in German banking sector continues
Skyline Frankfurt am Main

The consolidation process in the German banking sector continued in 2018. However, the number of institutions did not fall as steeply as in the year before on account of new additions in the context of banks operating in Europe and on the international stage preparing for Brexit. Over the course of the year, the overall number of credit institutions fell by 40 to 1,783. This corresponds to a 2.2% decline compared with a drop of 3.4% in 2017. 

Ensuring internal capital adequacy of less significant institutions (LSIs)

The Bundesbank has conducted an analysis of how internal capital adequacy is ensured within the German banking market. The results are generally positive, but most of the institutions still show a need for further structural improvement.

Supervisory assessment of bank-internal capital adequacy concepts and their integration into firm-wide performance and risk management processes ("ICAAP") – realignment

Bundesbank and BaFin have jointly redrafted the 2011 ICAAP guideline and published it on 24.05.2018. The realignment of the paper was made necessary by developments at the global and European levels as well as ongoing changes in institutional and regulatory practices.


Speaking at various occasions, members of the Bundesbank’s Executive Board regularly comment on issues relating to banking supervision.

Discussion papers

Click here for academically oriented studies prepared by the Research Centre, including work on financial stability, most of which is written in English.