A goal of the state supervision of the banks is it to guarantee the operability of the financial sector of a national economy. State supervision of the banks covers both the supervision of banking transactions, and other financial services.

In addition rules are set up which are to be considered during the establishment of banks and when the operation banking transactions. In addition are the financial establishments obligates their books the state supervision of the banks authorities to reveal. A goal is to guarantee the as well as confidence loss prevent. The rules represent however only basic conditions, so that meet free market principles one carries out.

In Germany the state supervision of the banks is noticed by the Federal Institution for supervision of financial service (BaFin) and the Federal Bank. The legal basis in addition is the law over the credit system (KWG). In Austria the financial market supervisory authority is responsible for the state supervision of the banks, the legal conditions for it creates the financial market supervisory authority law (FMABG).

The state supervision of the banks has extensive powers if the inserts of the creditors is seriously endangered or bankruptcy danger exists. In accordance with "§"§ 46 and 46a the BaFin under given conditions can intervene in the business activity directly, forbid the acceptance of inserts and close Kreditinstitut for traffic with customers.

History of the state supervision of the banks

The first general state supervision of the banks took place with the locking of the and central bank (Danatbank) due to the bank crisis 1931. In the year 1934 the "“realm law over the credit system"” came into force, the forerunner of the credit system law (KWG). The KWG was amended several times since the entry into force 1962. 1998 were expanded the principle 1 since market price risks.

See also: Baseler committee, Basel I, Basel II

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