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German Cooperative Financial Group

The German Cooperative Financial Group is a major and institutionalised cooperative banking network in Germany that includes local banks named Volksbanken and Raiffeisenbanken, the latter in tribute to 19th-century cooperative movement pioneer Friedrich Wilhelm Raiffeisen. The Cooperative Group represents one of the three "pillars" of Germany's banking sector, the other two being, respectively, the Sparkassen-Finanzgruppe of public banks, and the commercial banking sector represented by the Association of German Banks.

History
Founders' era In 1843, the first German cooperative bank was created by 50 inhabitants of Öhringen in the Kingdom of Württemberg, who named it the ("private savings and lending bank of Öhringen") – it still exists as the . In the later 1840s, economist Franz Hermann Schulze-Delitzsch started organizing the creation of cooperatives by local communities of craftsmen or farmers in his home town of Delitzsch, in the Prussian Province of Saxony, and promoted national legislation to encourage it. The first such venture, a or raw materials purchasing association, was created by a group of shoemakers in 1849. The next year in 1850, Schulze-Delitzsch created another association for advance payments to craftsmen in Delitzsch. In 1859, Schulze-Delitzsch convened the first group meeting of cooperatives or in Weimar and founded a central bureau of cooperative societies (), which he ran from 1861, which in 1864 became the general association of German commercial and economic cooperatives based on self-help (). Also in 1864, Schulze-Delitzsch led the creation of the bank Soergel, Parrisius & Co. in Berlin, also known as , to serve as central financial institution for the . Meanwhile, in 1864, Friedrich Wilhelm Raiffeisen fostered the creation of the first rural cooperative bank, the ("lending association of Heddesdorf"), in the village of near Neuwied, in Rhenish Prussia between Koblenz and Cologne. Raiffeisen considered joining Schulze-Delitzsch's initiative, but eventually concluded that the needs of rural communities were different from the ones of town craftsmen which were Schulze-Delitzsch's focus. In 1876, Raiffeisen created a financial institution in Neuwied to serve the network, which in 1926 was renamed . In 1877, he created the Bar Association of Rural Cooperatives , the first national body for his rural cooperative movement. In 1910, that association's headquarters was relocated from Neuwied to Berlin, and in 1917 it was renamed the General Association of German Raiffeisen Cooperatives (). allowing the BVR to claim in 2022 that "The protection scheme run by the Cooperative Financial Network is therefore the world's oldest exclusively privately financed deposit guarantee fund for banks." In 1939, Dresdner Bank phased out its cooperative-serving operations whose business was transferred to the , which thus became the sole national financial institution serving the cooperative banks. During World War II, savings were directed towards investment in government bonds as part of the regime's policy of financial repression. In the late 1960s, financial reform led to increased competition in the German banking sector, including with the Sparkassen, and encouraged the consideration of merger between the two national cooperative banking organizations, the and the . The negotiations were completed in 1972 with the creation of the Bundesverband der Deutschen Volksbanken und Raiffeisenbanken (BVR) in Bonn. At the same time, many local cooperatives merged, and regional organizations were consolidated. In 1975, new federal legislation redefined the role of the DGK, renamed it DG Bank, and allowed it to gradually take over the Cooperative Group's regional financial institutions. The next year, DG Bank started developing an international network, with its first offices abroad established in New York and Hong Kong. In the mid-1980s the cooperative group's regional structures in Bavaria ran into financial difficulties, and were taken over by DG Bank. This triggered a debate on the structure of the group, either with two tiers (local and federal) or three (with an intermediate regional level). In December 1989, a compromise was adopted, known as the , which acknowledged the coexistence of two-tier and three-tier structures within the Cooperative Financial Group. In July 1990, with German reunification, DG Bank assumed the role of central financial institution for the still existing and new in East Germany. In 1998, DG Bank was converted into a joint-stock company, and the cooperatives purchased the shares owned by the German federal government. In 2000, two of the remaining regional entities, (SGZ-Bank) in Frankfurt, a successor to the of Darmstadt, and (GZB-Bank) in Stuttgart merged to form GZ-Bank. It connected the bank deposit and a nearby underground parking lot. Probably nobody noticed anything, because the parking lot was shielded by roulettes, and people thought that this part was under repair. There are some similarities between this robbery and the Baker Street robbery in London. In 2024 it became public knowledge, that the Federal Financial Supervisory Authority had criticized the Düsseldorf-Neuss branch of the Volksbank for insufficient measures against money laundering. The company GIC International, allegedly founded in 2012 by the Iranian Ghadir holding, an entity of the regime in Iran, and sanctioned by the United States, did business with the Volksbank. Journalists had uncovered communication of GIC and Ghadir personnel as late as 2022. In 2024 the same Volksbank was conned by a former accountant of the French Kiabi fashion group to transfer Euro 100 million of Kiabi's money to an account in Turkey. As a result, Kiabi requested the money back from the Volksbank Düsseldorf-Neuss and the Financial Supervisory Authority replaced the management in November with a special representative. In early 2025 the Financial Supervisory Authority banned the "Raiffeisenbank im Hochtaunus eG" in Bad Homburg from granting loans. The bank had opened an online banking service in 2022 and had aggressively advertised for new customers. After press research, a combination of defaulted loans, Equity ratio and structural risks prompted the Supervisory Authority to intervene. File:Berlin, Am Zeughaus 1-2, Preussische Central-Genossenschafts-Casse.jpg|Building Am Zeughaus 2 in Berlin (right), from 1899 seat of the , and 1906 extension on Am Zeughaus 1 (left); now offices of the Deutsches Historisches Museum File:Gedenktafel Am Zeughaus 2 (Mitte) Preußische Central-Genossenschaftskasse.jpg|Plaque on the building Am Zeughaus 2 File:Bundesarchiv B 145 Bild-F027090-0003, Bonn, Adenauer-Allee, Raiffeisen Zentralbank.jpg|Regional in Bonn, Adenauerallee 121, photographed in 1968; now Bonn office of the Deutscher Genossenschafts- und Raiffeisenverband (DGRV) File:Bonn-Gronau Adenauerallee 127 Raiffeisenhaus.jpg| in Bonn, Adenauerallee 127, next to the previous building and a stone's throw from the former Federal Chancellery, former head office (and now Bonn office) of the File:2013-04-21 Schulze-Delitzsch-Haus, Heussallee 5, Bonn IMG 0087.jpg|, former seat of the and now Bonn office of the BVR File:City-Haus I, Frankfurt, Northwest view 20170226 1.jpg|City-Haus in Frankfurt, head office of DG Bank (1976–1993) and still part of the DZ Bank head office complex File:Frankfurt Westend Tower.Süd.20130616.jpg|Westendstrasse 1, head office of DG Bank (1993–2001) then of DZ Bank in Frankfurt, designed by Kohn Pedersen Fox File:Bürogebäude am Potsdamer Platz 20150224 1.jpg|Building at Schellingstrasse 4 in Berlin, designed by Arata Isozaki and completed in 1997; current head office of the BVR and of the DGRV File:DZ Bank Haus (Frank Gehry).jpg|DZ Bank building on Pariser Platz, initially DG Bank's Berlin office designed by Frank Gehry and completed in 2000 File:Inside the DZ Bank building in Berlin.jpg|Atrium inside the DZ Bank building in Berlin ==Group structure and operations==
Group structure and operations
The Cooperative Group's entities, which are also directly or indirectly member institutions of the BVR, include: • hundreds of local cooperative banks generally called ("cooperative bank"), ("people's bank"), ("united people's bank"), , or or ; • 14 PSD Banks, cooperative banks whose name is an acronym for "post, savings and loan associations" (); • 11 Sparda-Banks, cooperative banks whose name is a portmanteau also referring to savings and loans (); • several church cooperative banks: in Regensburg, , Bank im Bistum Essen, in Paderborn, Pax-Bank in Cologne, within , Steyler Bank in Sankt Augustin, KD-Bank in Dortmund, in Kassel, in Bad Homburg, and in Witten; • Deutsche Apotheker- und Ärztebank, the cooperative banks of German physicians and pharmacists, headquartered in Düsseldorf; • BBBank, a cooperative private banking specialist in Karlsruhe; • Münchener Hypothekenbank in Munich. • DZ Bank in Frankfurt, the group's central credit institution, which in turn owns cooperative mortgage banks Bausparkasse Schwäbisch Hall and in Hamburg and Münster, private banker in Luxembourg, insurer in Wiesbaden, liquidity manager in Nuremberg, asset manager Union Investment in Frankfurt, financing specialist (formerly VR Leasing) in Eschborn, and other specialized institutions. Supervision The entities of the Cooperative Financial Group are separately supervised, unlike other cooperative groups with similar structures such as OP Financial Group in Finland, Groupe BPCE and Crédit Mutuel in France, and Rabobank in the Netherlands, whose name also refers to Raiffeisen. As of early April 2022, DZ Bank, Deutsche Apotheker- und Ärztebank and Münchener Hypothekenbank were designated as significant institutions under European Banking Supervision and thus directly supervised by the European Central Bank (ECB), whereas the other banks within the group were supervised by BaFin under the ECB's supervisory oversight. The ECB and BaFin work together on the assessment of the Cooperative IPS. Institutional Protection Scheme The core financial structure of the Cooperative Financial Group is its Institutional Protection Scheme (IPS), a mutual support arrangement in accordance to Article 113(7) of the EU Capital Requirements Regulation. As of end-March 2022, the Cooperative IPS included a total of 781 entities. The entity that operates the IPS is , also known as BVR-SE. As with the Sparkassen-Finanzgruppe, the interventions of the Cooperative Group IPS are generally not made public. The International Monetary Fund disclosed in 2016 that the IPS had provided support to member banks in two cases in 2011, for a total intervention amount of €114 million, and again in 2013 and 2014 for €11 million in each case. Deposit insurance As a consequence of the EU Deposit Guarantee Scheme Directive (DGSD) and the broader policy of European Banking union, the BVR has set up a statutory deposit insurance scheme, in addition to its pre-existing IPS and operated by a separate legal entity, (BVR-ISG). BVR-ISG is recognized as a deposit guarantee scheme under DGSD; it operates alongside the IPS and in coordination with it, with a liability arrangement that ensures that the IPS funds are readily available to BVR-ISG. The membership of BVR-ISG is identical to that of the IPS entity BVR-SE and to that of the BVR itself. Accounting The BVR publishes consolidated financial statements of the Cooperative Financial Group, in line with the reporting requirements for institutional protection schemes set out in Article 113(7)(e) of the EU Capital Requirements Regulation. These financial statements are prepared in line with International Financial Reporting Standards. They are not reviewed by an external auditor. Separately, DZ Bank publishes audited consolidated financial statements. International activities The Cooperative Financial Group's operations are predominantly domestic in Germany. Even for the central financial institution DZ Bank, Germany represented 88.3 percent of total operating income in 2020. Branding , showing the Cooperative Financial Group's logo guarantee card issued by before 1993, showing the former Volksbanken and Raiffeisenbanken logos Many of the group's local member banks use the or name or variants thereof, reflected in the abbreviations "VR" or "R+V" in the names of some of the 's entities. Other local banks have kept a pre-existing name that predates the constitution of the Cooperative Group as a national network. With the increased integration of the formerly separate Volksbanken and Raiffeisenbanken networks, the Cooperative Group has created a blue-orange color code that blends features of the two previous logos, respectively a stylized "V" and a house gable motif with sculpted horseheads, the latter already present during Raiffeisen's lifetime. The new logo has been adopted by most of the group's cooperative member banks, with few exceptions such as Bausparkasse Schwäbisch Hall which has kept its historic red-yellow logo. File:Volksbank-Mosaik.jpg|Former logo of the , displayed on a pavement in Freiburg im Breisgau File:Logo-Raiffeisenbank-1877.svg|Former Raiffeisen logo with the house gable motif File:Bausparkasse Schwäbisch Hall logo.svg|Logo of Bausparkasse Schwäbisch Hall National representation The Bundesverband der Deutschen Volksbanken und Raiffeisenbanken (BVR) represents the Cooperative Financial Group nationally and before European institutions. ==See also==
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