Good Reasons for Banking in Germany

Transcription

1 Good Reasons for Banking in Germany

2 Agenda Germany s Assets The German Banking and Financial Sector Association of Foreign Banks in Germany Discussion - 2 -

3 Germany s Assets - 3 -

4 Germany s Assets Economy Stable and political certainty Strongest economy in the EU Still growing (more than + 2 %) High/increasing exports (no. 2 worldwide) Increasing number of jobs subject to social security contribution Large number of employees in Germany Very low rate of unemployment (under 3,4 %, EU 6,8 %) Low number of strike days (in comparison to other EU member states, 10 times less than France) Budget surplus in the last 3 years - 4 -

5 Germany s Assets German tax and contribution ratio for social security under 37 % for family households (means international midfield) Good social security and health system Tax relief for families Temp. employment up to 2 years Liberalisation of job protection for high potentials planned Withholding tax rate on capital income of 25 % + solidarity surcharge VAT rate 19 % (2018: no. 3 in the EU) Tax rate for corporations under 30 % No tax increase planned - 5 -

6 Germany s Assets Frankfurt Region with ca. 5.7 million people Gross domestic product no. 2 in the EU Effective banking supervision: BaFin and Bundesbank Excellent IT infrastructure Largest internet interface worldwide Globally leading software companies (e.g. SAP) Place to be for FinTechs Outstanding traffic infrastructure In the heart of Germany and continental Europe One of the most important airport (no. 3 in Europe, 20 minutes from city center, no. 10 of the best airports in the world 2017) Central main station (more than 1,100 trains a day) Important intersection hub of motorways crossing Public transportation system (underground etc.) - 6 -

7 Germany s Assets Frankfurt Opportunities for offices Ca. 127,000 m² class A for rent Cost: Euros/m² pre-tax New office possibilities in the next 3 years International City More than 25 % are non-germans People from ca. 177 countries More than 15 % foreign students International fairs Hot spot for Science and Research More than 40 research institutions, universities, colleges, business schools International schools Group Deutsche Boerse, Eurex, Eurex Clerastream - 7 -

8 Germany s Assets Frankfurt is a Mobile City Modern City Historical City City of culture City of poets and philosophers Shopping metropolis Green City - 8 -

9 Frankfurt in Comparison - 9 -

10 Germany s assets Frankfu rt compared to London

11 The German Banking and Financial Sector

12 The German Banking and Financial Sector 1 Universal banking system 2 Bank-based (vs. market-based) financial system 3 Hausbank / principal bank principle 4 Three pillars of bank types Commercial banks Savings banks (Sparkassen) and Landesbanken Cooperative banks (Volks- und Raiffeisenbanken) 5 Fragmentation

13 The German Banking and Financial Sector 1990: 4,719 credit institutions with 44,390 branches 2007: 2,277 credit institutions with 39,833 branches 2017: 1,823 credit institutions with 30,126 branches: 398 savings banks and 8 Landesbanken 919 coorporative banks and their central institute DZ Bank 275 private banks, thereof about 200 foreign banks Balance sheet totals of German banks: 7,851 bn Euros (Mai 2018)

14 The German Banking and Financial Sector Staff in banks: 2016: 609,000 staff 2013: 645,000 staff 2008: 680,450 staff 2003: 722,000 staff 1993: 773,050 staff acc. to VAB: in foreign banks ca. 30,000 staff Germany: 1,823 banks Compared to the EU (source: EBA): EU: 5,616 banks United Kingdom: 378 banks France: 425 banks Italy: 512 banks Spain: 202 banks Austria: 570 banks Netherlands: 91 banks

15 The German Banking and Financial Sector

16 The German Banking and Financial Sector Domicile of the European Central Bank as supervisor of the 119 bigest banks/banking groups of the Euro system und ca 82 % of the assets in the Euro zone EIOPA location for European authority of insurance companies Domicile of Deutsche Bundesbank, FSMA (Federal Agency for Financial Market Stabilisation, Germany s national resolution authority) and BaFin/German FSA (besides Bonn; new: consumer protection) Domicile of the GLEIF as an international institution to provide the Legal Entity Identifier (LEI) for the world-wide market

17 The German Banking and Financial Sector Frankfurt is the financial centre and not only magnet for all financial institutions in continental Europe, but also domicile i.e. for: Research and science, e. g. House of Finance Concultancy, audit and legal companies Communication companies IT infrastructur (increasing number of international) associations FinTech Deutsche Boerse, Eurex and Eurex Clearing Frankfurt as domicile for the Euro-Clearing for Banks from non-euro countries Frankfurt as domicile in the EU for the Renminbi Clearing

18 The German Banking and Financial Sector Effective and efficient BaFin (Federal Financial Supervisory Authority, FSA) and Deutsche Bundesbank Large number of employees Involved in the process of developments of TARGET2 and TARGET2-Securities (T2S) Young institution FSA Part of the Joint Supervisory Teams (SSM supervision) Expertise in internal risk models Open for discussion, reliable and consistent Documentation in English German politics and supervisors are willing to accept more banks Supervision is preparing for new applications and discussion with the market BaFin BREXIT workshop in January 2017 with the topics back-to-back booking, risk management and risk models (especially internal models), outsourcing as well as transitional periods

19 The German Banking and Financial Sector English information and forms for new banks by BaFin, the Federal Financial Supervisory Authority: men_node_en.html English information by the Deutsche Bundesbank, including translations of the legal framework for banks:

20 The German Banking and Financial Sector Consolidation of the German banking market in the last 25 years, especially of the German banks Consolidation in back office (e. g. security clearing and settlement, payments) But: only a slight consolidation after the start of the financial crisis Furthermore: no significant decrease of the number of branches Decrease especially in private banking (today: ca 10,000 branches) Banks in Germany do not have the same amount of importance as in other countries of the EU Decrease of the presence of German banks abroad

21 The German Banking and Financial Sector Three pillars of banking groups No central association Associations: BVR Bundesverband der Deutschen Volksbanken und Raiffeisenbanken e. V. BdB Bundesverband deutscher Banken e. V. VOEB Bundesverband Oeffentlicher Banken Deutschlands e. V. DSGV Deutscher Sparkassen- und Giroverband e. V. vdp Verband deutscher Pfandbriefbanken e. V. Together: Die Deutsche Kreditwirtschaft

22 The German Banking and Financial Sector 156 foreign banks and 34 representative offices in Frankfurt Other important cities with foreign banks: Munich, Duesseldorf and Hamburg Overall about 30,000 employees in Germany Market shares of the member institutions ca %

23 Association of Foreign Banks in Germany

24 Association of Foreign Banks in Germany The VAB was established in Frankfurt/Main in 1982 (10 staff). VAB is the representative for foreign banks, investment funds, financial services institutions and representative offices. VAB is a service provider for the member institutions, the governing authorities, the media and the public. VAB is the representative of the international financial community concerning politics, media and publicity in Germany. Members are i.a.: Goldman, J.P. Morgan, Morgan Stanley, UBS, BNP, SoGé, Bank of China etc. Advantages for members: Individual, prompt and direct Specialised premium seminars and cost-free working groups Just in time information on the important and necessary legal and tax developments Networking

25 Members of the Association Erstmitglieder/ Full Members Zweitmitglieder/ Associate Members

26 Association of Foreign Banks in Germany Current Brexit topics discussed at the Association level: European Passports and market access Outsourcing and back to back models Market infrastructure, securities settlement and payments transactions IT and data protection Contracts and contract documentation Transitional periods and grandfathering Equivalence Free movement of labour, expatriates and impatriates Tax issues (APA etc.)

27 Association of Foreign Banks in Germany Our current legal topics Implementation of MiFID II (FiMaNoG II) Reform of the Minimum Requirements for Risk Management (MaRisk) Reform of the requirements for remunerations systems IT Security Requirements for recovery and resolutions (BaFin is asking for the recovery plans in various tranches) New circular on the requirements for custody banks Requirements for Broker /Dealer 5th Anti-Money Laundering Directive Brexit contingency planning

28 Association of Foreign Banks in Germany Our current tax topics Taxation of permanent establishments (PE) according to the Authorized OECD Approach (AOA) BEPS (Base Erosion and Profit Shifting) and reporting requirements Hybrid Capital Common Reporting Standard (CRS) and FATCA CCCTB (Common Consolidated Corporate Tax Base in the EU) Withholding Tax Taxation of investment funds (reform 2018) Financial Transaction Tax in the EU Double Tax Treaty, Advance Pricing Agreements and arbitration procedure Taxation of expatriates VAT (Wage) Tax audit

29 Discussion

30 Discussion Frankfurt in the Future Internationalisation Centre for European harmonisation and development of European structures of banking supervision Capital of banking regulation and banking supervision Hot spot for foreign banks New banks, financial institutions and counsultants Infrastructure developments Stable tax rates

31 Verband der Auslandsbanken in Deutschland e.v. Weißfrauenstraße Frankfurt am Main Tel.: Fax: