Abstract

Frankfurt am Main commonly known simply as Frankfurt, is the largest city in the
German state of Hesse and the fifth-largest city in Germany, with a 2009 population of
672,000. The urban area had an estimated population of 2,295,000 in 2010. The city is
at the centre of the larger Frankfurt/Rhine-Main Metropolitan Region which has a
population of 5,600,000 and is Germany's second largest metropolitan area.

In English, this city's name translates to "Frankfurt on the Main" (pronounced like
English mine or German mein). The city is located on an ancient ford on the river Main,
the German word for which is "Furt". A part of early Franconia, the inhabitants were the
early Franks. Thus the city's name reveals its legacy as being the "ford of the Franks".

Belgium officially the Kingdom of Belgium, is a state in Western Europe. It is a

founding member of the European Union and hosts the EU's headquarters, as well as
those of several other major international organizations such as NATO. Belgium covers
an area of 30,528 square kilometres (11,787 sq mi), and it has a population of about
10.8 million people. Straddling the cultural boundary between Germanic and Latin
Europe, Belgium is home to two main linguistic groups, the Dutch-speakers, mostly
Flemish, and the French-speakers, mostly Walloons, plus a small group of German-
speakers. Belgium's two largest regions are the Dutch-speaking region of Flanders in
the north and the French-speaking southern region of Wallonia. The Brussels-Capital
Region, officially bilingual, is a mostly French-speaking enclave within the Flemish
Region. A small German-speaking Community exists in eastern Wallonia. Belgium's
linguistic diversity and related political and cultural conflicts are reflected in the political
history and a complex system of government.

The Deutsche Bundesbank (German for German Federal Bank) is the central bank of
the Federal Republic of Germany and as such part of the European System of Central
Banks (ESCB). Due to its strength and former size, the Bundesbank is the most
influential member of the ESCB. Both the Deutsche Bundesbank and the European
Central Bank (ECB) are located in Frankfurt am Main. It is sometimes referred to as
"Buba" for Bundesbank.

The Bundesbank was established in 1957 and succeeded the Bank deutscher Länder,
which introduced the Deutsche Mark on 20 June 1948. Until the euro was physically
introduced in 2002, the Deutsche Bundesbank was the central bank of the former
Deutsche Mark ("German Mark", sometimes known in English as the "Deutschmark").

The Deutsche Bundesbank was the first central bank to be given full independence,
leading this form of central bank to be referred to as the Bundesbank model, as
opposed, for instance, to the New Zealand model, which has a goal (i.e. inflation target)
set by the government.
The Bundesbank was greatly respected for its control of inflation through the second
half of the 20th century. This made the German Mark one of the most respected
currencies, and the Bundesbank gained substantial indirect influence in many European
countries.
History of the Deutsche Bundesbank as an organization

1948-1957

The history of the Bundesbank is inextricably linked with the history of the German
currency after the Second World War. Following the total destruction after the war, the
old Reichsmark was practically worthless, and a currency reform was implemented in
the western occupation zones including West Berlin: on 21 June 1948, the D-Mark, or
Deutsche Mark, replaced the Reichsmark. The currency reform was based on laws
enacted by the Allied military government. In preparation, the Western Powers
established a new two-tier central bank system in the occupied zones; in its federal
structure, it was modeled on the Federal Reserve System of the USA. It comprised the
central banks of the states (Länder) of the West German occupation zones and the
Bank deutscher Länder in Frankfurt am Main, which was created on 1 March 1948. The
central banks of the Länder acted as central banks within their areas of jurisdiction. The
Bank deutscher Länder, whose share capital was held by the central banks of the
Länder, was responsible for issuing bank notes, co-ordinating policy and various central
tasks including management of foreign exchange. The supreme governing body of the
two-tier central bank system was the Central Bank Council (Zentralbankrat) set up at
the Bank deutscher Länder. It consisted of a president, the presidents of the central
banks of the Länder and the president of the directorate (board) of the Bank deutscher
Länder. Amongst other things, the Central Bank Council determined policy on bank rate
and minimum reserve policy, open-market policy guidelines and granting of credit. After
the negative experience with a central bank subject to government orders, the principle
of an independent central bank was established. The Bank deutscher Länder was
independent of German political bodies from the start, including the federal German
government, which was active from September 1949. It achieved independence from
the Allies in 1951.

1957-1990

The German "Basic Law" (constitution), which had come into force on 1949-05-23,
placed an obligation on the German federal legislature to establish a federal bank
responsible for the issue of bank notes and currency. The legislature fulfilled this
obligation by passing the Bundesbank Act (BBankG) of 1957-07-26, which abolished
the two-tier structure of the central bank system. The central banks of the Länder were
now no longer independent note-issuing banks, but became regional headquarters of
the Bundesbank, nevertheless retaining the title "state central bank"
(Landeszentralbank).

The Central Bank Council remained the supreme decision-making body of the
Bundesbank. It was now made up of the presidents of the central banks of the Länder
and a board of directors based in Frankfurt am Main. The Central Bank Council decided
on the currency and credit policy and laid down rules for management. As the central
executive body of the Bundesbank, the Directorate (Direktorium) was responsible for
implementing the decisions of the Central Bank Council. The Directorate ran the bank
and was, in particular, responsible for dealings with the federal government and its
"special assets" (Sondervermögen), for transactions with credit institutes operating in
the Federal republic of Germany, for currency transactions, and foreign commercial
transactions, and for open-market dealings. The Directorate was made up of the
president and the vice-president of the Bundesbank and up to six additional members.

The central banks of the Länder carried out business falling in their areas
independently. The Bundesbank Act explicitly made them responsible for dealings with
public bodies and credit institutes. The central Banks of the Länder also controlled the
subsidiary bodies (Zweiganstalten), now called branches (Filialen). Overall
management of each Land central bank was in the hands of its executive board
(Vorstand), which as a rule consisted of the president and the vice-president of the
bank.

1990-1993

Following the "Fall of the Berlin Wall", the treaty of 1990-05-18 created an economic,
social and currency Union between the Federal Republic of Germany and the German
Democratic Republic; it came into force on 1990-07-01 and made the D-Mark the sole
legal tender in both German states. The Bundesbank was made responsible for money
and currency policy within the whole of the currency union. A "Provisional Administration
Body" was set up for the purpose of implementing the treaty, and this body continued to
operate beyond the official date of reunification until 1992-10-31. The Bundesbank Act
was amended to adjust the organizational structure of the Bundesbank to better match
changed circumstances following German reunification, and at the same time
streamline the organisation. The eleven central banks of the Länder and the Provisional
Administrative Body were replaced by nine central banks of similar economic size.

1993-2001

A 10 DM Note, Issued By The Bundesbank

The Maastricht Treaty that came into force on 1993-11-01 laid the foundation for the
European Economic and Currency Union (EECU). National responsibility for monetary
policy was transferred, at the Community level, to the European System of Central
Banks (ESCB), comprising the European Central bank (ECB) and the national central
banks (NCBs) of the EU states. Until the ECB became fully responsible for currency in
2001, the Bundesbank had three governing bodies. The Central Bank Council
(Zentralbankrat) was the supreme body of the Bundesbank. It was made up of:
 1. The Directorate, which comprised the president, the vice-president and six
additional members. These eight people were nominated by the Federal
Government (Bundesregierung)
2. The nine presidents of the Landeszentralbanken. These were nominated by the
Bundesrat.

The Directorate was the executive body of the Bundesbank, while all currency policy
decisions were made by the Central Bank Council.

2001-present (2006)

In 2001 the ECB took over full control of currency. The Bundesbank Act was last
amended in 2002 by the 7th Law Amending the Law on the Bundesbank of 2002-04-30,
which gave the Bundesbank its current structure.
 Mission Statement

Thinking today about tomorrow

We believe sustainability means future viability - with the aim of ensuring that future
generations enjoy a healthy environment as well as stable economic and social
conditions. We are committed to this guiding principle.

Taking sustainability into account serves to secure our long-term corporate value and
reputation. Sustainability is an integral component of our business decisions. We go
beyond legal requirements in taking into account social, ethical and ecological aspects
in our everyday business.

We review and continually improve our everyday work procedures according to

sustainability-related criteria.

We are committed to ensuring our staff members enjoy a healthy work environment,
with legal requirements being an absolute minimum. As far as possible, we use the
most eco-friendly technology and spare natural resources.

We regularly monitor our operations and goals.

We are committed to maintaining a sustainability management which will allow for

continual improvement and prevention of pollution, as well as to comply with applicable
legal requirements and with other environmental requirements Deutsche Bank has
subscribed to.
 Vision Statement

Enriched by a tradition of selfless effort and heartfelt commitment on the part of the
Sponsoring Religious Congregations to the youth of Baltimore, Mother Seton Academy
will provide a holistic, intercultural approach to middle school education for an urban
population confronted daily with influences that limit their ability to develop their full
potential. Mother Seton Academy students will be given the opportunity to develop as
women and men who are socially and globally conscious, ready to become productive
and morally responsible leaders with vision and purpose for their lives, families and
communities.
The Bundesbank today

After the ECB took over responsibility for currency, the Bundesbank continued to exist.
Its duties were redefined by the 7th Law amending the "Law on the German
Bundesbank" of 2002-04-30.

Duties

The duties of the Bundesbank are defined in Section 3 of the Bundesbank Act:

The Deutsche Bundesbank, being the central bank of the Federal Republic of
Germany, is an integral part of the European System of Central Banks (ESCB). It
shall participate in the performance of the ESCB's tasks with the primary
objective of maintaining price stability, and shall arrange for the execution of
domestic and international payments. In addition, it shall discharge the duties
assigned to it under this Act or other legislation

Unlike other central banks such as the Bank of England and the U.S. Federal Reserve
(but like the ECB), the Bundesbank is not officially responsible for maintaining the
stability of the financial system and is not a lender of last resort. Based on the
Bundesbank Act and the ECB Statute, the Bundesbank has four areas of activity, which
it mostly handles jointly with the ECB:

 the Bundesbank as a note-issuing bank

 the Bundesbank as the banks' banker (clearing house and bank supervision)
 the Bundesbank as the state's banker
 the Bundesbank as the manager of currency reserves

The Bundesbank as a note-issuing bank

As a note-issuing bank, the Bundesbank provides the economy with cash, and ensures
the physical circulation of cash. It checks the cash delivered by banks and money
transport companies, removes counterfeit money from circulation and hands it to the
police. It changes D-Mark holdings still in circulation, without any time limit and replaces
damaged or mutilated notes (National Analysis Centre for Counterfeit and Damaged
Banknotes and Coins). It also issues information on the safety mechanisms for notes
and coins and issues a weekly bulletin on the volume of cash in circulation.
The Bundesbank as the banks' banker

In relation to the commercial banking system, the Bundesbank has two functions:

Clearing house for commercial banks

Firstly, the Bundesbank is a refinancing source and clearing house for the commercial
banks. The commercial banks can use what are known as "refinancing instruments" to
cover their needs for central bank money through the Bundesbank and the ECB. Until
the end of 1998, the control of the money supply by this method was one of the main
tasks of the Bundesbank. Since 1999-01-01, one of the principal aims of the ECB has
been to maintain price stability by means of its monetary strategy. Commercial banks
can deposit money that is temporarily surplus to requirements with the
Bundesbank/ECB (known as a deposit facility). The Bundesbank supports cross-border
payments between domestic and foreign commercial banks, for instance by means of
the German real time gross transfer system RTGSplus, TARGET, and in future
TARGET2.

Bank supervision

The bank also helps to regulate commercial banks, in close cooperation with the
German financial regulatory agency the Bundesanstalt für Finanzdienstleistungsaufsicht
(BaFin).

The Bundesbank as the state's banker

As the state's banker, the Bundesbank provides accounts and performs normal banking
services for federal, state (Land) and local authorities, as well as for the statutory social
security organizations. All such accounts are required to have a positive balance, i.e.
the Bundesbank is not allowed to grant credits to the public sector. This is due to
negative historical precedents in connection with the financing of two world wars by the
Deutsche Reichsbank. It also carries out securities transactions for the federal
government (Bundesfinanzagentur).
The Bundesbank as the keeper of the currency reserves

Currency reserves are all assets of the Bundesbank that are not specified in EUR,
including gold reserves, securities in foreign currency, credit with foreign banks, foreign
exchange, etc. Currency reserves can be invested for profit and also provide a
possibility of intervening in the market if the exchange rate fluctuates strongly. The gold
reserves of the Bundesbank are the second largest in the world (after the U.S Federal
Reserve). At present (November 2006), the Bundesbank has gold reserves of 3,427
tonnes, with a market value of about €65.4 billion (2007-11-17).

Structure

The Bundesbank has nine regional headquarters in the Länder, the former central
banks of the Länder and 66 branches (Filiale). As of 2006-06-30, the Bundesbank had a
total of 12,474 employees.[6] By the end of 2007 the number of regional subsidiaries is
to be reduced to 47. The regional subsidiaries are available to banks, public authorities
and money transport enterprises for the provision of cash and the clearing of credit
transfer.
Presidents of the predecessors of the German Bundesbank

 1948–1957: Karl Bernard, Chairman of the Central Bank Council (Zentralbankrat)

of the Bank deutscher Länder
 1948–1957: Wilhelm Vocke, President of the Directorate of the Bank deutscher
Länder, from 1957-08-01

Presidents of the German Bundesbank

 1958–1969: Karl Blessing

 1969–1977: Karl Klasen
 1977–1979: Otmar Emminger
 1980–1991: Karl Otto Pöhl
 1991–1993: Helmut Schlesinger
 1993–1999: Hans Tietmeyer
 1999–2004: Ernst Welteke
 2004: Jürgen Stark, interim president
 since 2004: Axel A. Weber
The Bundesbank’s role in cashless payment operations

Things are changing in the payments world. The driving forces are competition, cost
pressure and the medium-term enlargement of the euro area – not to mention
technological advances leading to new products, procedures and infrastructures.

What does this mean for the Deutsche Bundesbank? How does it affect its payments
strategy and policy?

Section 3 of the Bundesbank Act “The Deutsche Bundesbank, being the central bank of
the Federal Republic of Germany, is an integral part of the European System of Central
Banks (ESCB). It shall participate in the performance of the ESCB’s tasks with the
primary objective of maintaining price stability, (...) shall arrange for the execution of
domestic and cross-border payments and shall contribute to the stability of payment and
clearing systems.”

The Bundesbank sees itself as beeing in partnership with the banking industry. Through
active participation and ongoing dialogue with the banking industry, the Bundesbank
promotes efficient and secure payment transactions within Germany and in the
developing single European payments area.

The Bundesbank has a vital function in the provision of clearing and settlement
services. The focal point of its operational role is to create market infrastructures for the
banking industry.

At the policy-making level, the Bundesbank is involved, as part of the European System
of Central Banks (ESCB), in the ongoing development of European payment services,
such as the drive towards greater standardisation, and thus helps to boost efficiency in
the field of European payment transactions. It also presents its views on global payment
and securities settlement issues at the G10 level.

Overseeing payment systems is one of the Bundesbank’s fundamental tasks and

makes an important contribution to maintaining and strengthening the stability of the
financial system. The Bundesbank’s activities range from monitoring compliance with
international oversight standards, through observing developments in the payment field
and maintaining contact with market participants, to working on joint ventures with other
central banks and banking supervisors.
Responsibility for efficiency and security, support for payment
system innovations The Bundesbank pursues these strategic
objectives by:

 operating its own high-performance, competition-neutral interbank

payment systems,
 continuously improving its own range of payment services,
 working with the banking industry and other central banks to develop
efficient payment structures in Europe,
 carrying out the oversight function as well as monitoring, analysing and
evaluating developments in payment and settlement systems.
Euro-Banknotes

Authentication

Several security features have been incorporated into the euro banknotes so that, upon
careful examination, the authenticity of the banknotes can be reliably determined.

1. Feel
Feel the raised print the special printing process gives the banknotes their unique
feel. The initials of the European Central Bank, the value numerals and the motifs
of windows and gateways will feel embossed to the touch. Be aware that through
wear and tear some of these properties can be deteriorated.
2. Look
Look at the banknote and hold it up to the light: the watermark, the security
thread and the see-through register will then be visible. All three features can be
seen from the front and the reverse side of genuine banknotes.
3. Tilt
Tilt the banknote: on the front of the banknote, you can see the shifting image on
the hologram foil stripe (on low-value banknotes, ie €5, €10 and €20) or the
hologram foil patch (on high-value banknotes, ie €50, €100, €200 and €500). On
the reverse side, if you tilt the banknote, you can see the brilliance of the
iridescent stripe (on the low-value banknotes) or the colour-shifting optically
variable ink (on the high-value banknotes).
4. Check
Check all the security features described above to ensure the banknote's
authenticity.

Security features

The security features contained in euro banknotes include

 Intaglio printing
 Watermark
 Security thread
  See-through register
 Foil stripe (€5, €10, €20) or foil patch (€50, €100, €200, €500), both showing
holographic effects
 Iridescent stripe (€5, €10, €20) or optically variable ink (€50, €100, €200, €500)
 Microprinting
 Ultra-violet properties (fibres and ink)
 Infra-red properties

Intaglio printing

Intaglio printing is used to apply a tactile relief to the

front side of the banknotes; the abbreviations of the
European Central Bank in the various national
languages (BCE, ECB, EZB, EKT, EKP), the value numeral and the pictures of the
windows and gateways are identifiable by touch. At the edge on the front of the €200
and €500 notes grids of parallel tactile lines have been printed to make it easier for the
visually impaired to recognise the banknotes. The euro banknotes are also printed on
special paper with a distinctive surface texture. Be aware that through wear and tear
some of these properties can be deteriorated.

Watermark

If a banknote is held up to the light, the watermark appears on both sides of the
non-printed area. Both the predominant architectural motif (multitone watermark)
and the value numeral (electrotype watermark) can be seen. The watermark is
generated by varying the paper thickness as the paper is being manufactured.
This can be seen in several areas, some of which are lighter and others darker
than the surrounding paper.

Security thread

The euro banknotes contain a security thread which is embedded into the paper
near the middle of the note and is visible when held up to the light.

A dark line runs from top to bottom of the banknote.

If one looks more closely at the thread against the light, the word EURO and the
value numeral (alternatively readable and mirrored) appear.
See-through register

The see-through register is a feature found in the upper left-hand corner on the
front of the banknote. Irregular shapes printed on the front and back of the euro
banknotes form a complete value numeral when held up to the light.

Foil stripe (€5, €10, €20) or foil patch (€50, €100, €200, €500), both showing
holographic effects
Different foil elements are used on the low-value and high-value banknotes.

A foil stripe can be found on the front right-hand side of the

low-value banknotes (€5, €10 and €20). When the
banknote is tilted, either the euro symbol or the value
numeral - depending on the viewing angle - appears as a
hologram with shifting colours.

A foil patch can be found on the front right-

hand side of the high-value banknotes (€50,
€100, €200 and €500). When these
banknotes are tilted, either the value
numeral or the architectural motif - depending on the viewing angle -
appears as a hologram with shifting colours.
When held up to the light, a closer look at the foil stripe as well as the foil patch reveals
a euro symbol generated by transparent dots in the foil metallisation.

 Foil stripe movie | MPEG Format | 500 KB

 Foil patch movie | MPEG Format | 400 KB

Iridescent stripe / Optically variable ink

In addition to the hologram foils, there is a second difference

between the low-value and the high-value euro banknotes. If you
look at the reverse of the €5, €10 and €20 banknotes, you will see
an iridescent stripe next to the security thread. The stripe varies in
colour from light yellow to gold yellow when the note is tilted and
also reveals the euro symbol and value numeral (5, 10 or 20).

The €50, €100, €200 and €500 banknotes

contain an optically variable colour element. Depending on the
viewing angle, the value numeral in the lower right-hand corner on
the reverse of these four notes changes colour from reddish-purple
to olive-green or brown.
  Iridescent stripe movie | MPEG Format | 250 KB
 Optically-variable colour movie | MPEG Format | 1,3 MB

Microprinting

Under a magnifying glass you can see tiny printing on some areas of the banknote. The
texts are perfectly legible; however, some of them do differ in size. For example, 0.8
mm sized print can, in the majority of cases, be read by the naked eye. The 0.2 mm
micro printing, on the other hand, simply appears as a thin line to the naked eye, but
itcan be read with the aid of a magnifying glass. The smallest print on an authentic
banknote should be sharp and not blurred.

Ultra-violet properties (fibres and ink)

Check the following characteristics under ultraviolet light

1. The banknote paper does not become fluorescent, ie it emits no light and is “UV
dull”.
2. The fluorescent fibres embedded in the paper are visible either in red, green or
blue colour.
3. On the front of the banknote, the blue ink of the European flag and the signature
of the ECB President becomes green under ultra-violet light, the yellow stars
become orange.
4. On the reverse side, the map of Europe, the bridge and the denomination appear
in yellow under ultra-violet light.

Infra-red properties

With an infrared viewer, you can see the right part of the intaglio pattern as well as the
foil stripe.
Consolidated Statement of Income
The accompanying notes are an integral part of the Consolidated Financial Statements.

in € m., except per share data [Notes] 2006 2005 2004

Net interest revenues:        
Interest revenues [23] 55,217 41,708 28,023
Interest expense [23] 48,298 35,707 22,841
Net interest revenues   6,919 6,001 5,182
Provision for loan losses [7], [8] 330 374 372
Net interest revenues after provision for
  6,589 5,627 4,810
loan losses
Noninterest revenues:        
Commissions and fees from fiduciary
  3,995 3,556 3,211
activities
Commissions, broker’s fees, markups on
securities underwriting and other securities   5,019 4,057 3,711
activities
Fees for other customer services   2,530 2,476 2,584
Trading Revenues, net [30] 8,247 7,429 6,186
Net gains on securities available,
[5] 407 1,055 235
for sale
Net income from equity method
[6] 512 418 388
investments
[6], [13],
Other revenues 709 648 421
[30]
Total noninterest revenues   21,419 19,639 16,736
Noninterest expenses:        
[20], [24],
Compensation and benefits 12,649 10,993 10,222
[30]
Net occupancy expense of premises   1,020 1,014 1,258
Furniture and equipment   157 169 178
IT costs   1,586 1,539 1,726
Agency and other professional service fees   1,202 895 824
Communication and data services   634 599 599
Other expenses   2,412 3,178 2,291
Goodwill impairment/impairment of
[12] 31 – 19
intangibles
Restructuring activities [28] 192 767 400
Total noninterest expenses   19,883 19,154 17,517
Income before income tax expense and
  8,125 6,112 4,029
cumulative effect of accounting changes
Income tax expense [25] 2,186 2,039 1,437
Effect from the reversal of 1999/2000
[25] (1) 544 120
credits for tax rate changes
Income before cumulative effect of
  5,940 3,529 2,472
accounting changes, net of tax
Cumulative effect of accounting changes,
[2] 46 – –
net of tax
Net income   5,986 3,529 2,472
Earnings per common share (in €): [2], [26]      
Basic:        
Income before cumulative effect of
  13.20 7.62 5.02
accounting changes, net of tax
Cumulative effect of accounting changes,
  0.10 – –
net of tax
Net income   13.31 7.62 5.02
Diluted:        
Income before cumulative effect of
  11.46 6.95 4.53
accounting changes, net of tax
Cumulative effect of accounting changes,
  0.09 – –
net of tax
Net income   11.55 6.95 4.53
Cash dividends declared per common
  2.50 1.70 1.50
share
 International Institute of Planning & Management,
Satbari, New Delhi

Name Batch Phone no. Email id Section

Abhishek Choudhary 08-11 9910903937 lakra.abhsihek@gmail.com UG-3

Himanshu Bhatia 08-11 9811412585 himanshuthegeniuos2002@yahoo.com UG-3

Prabal Jain 08-11 9910040415 prabalj3@gmail.com UG-3

GOTA Program details:

Country visited: Belgium and Germany

Companies visited: Coca cola bottling plant

Port of Antwerp

European Parliament

Duetsche Bundesbank

Duetsche Stock Exchange/Frankfurt Stock Exchange

 Table of Contents

1. History of the Deutsche Bundesbank as an organization

2. Mission Statement

3. Vision Statement

4. The Bundesbank as of today

5. The Bundesbank as the banks' banker

6. Presidents of the predecessors of the German Bundesbank

7. The Bundesbank’s role in cashless payment operations

8. Euro-Banknotes

9. Consolidated Statement of Income

10. Bibliography