Germany has a stable and powerful financial system, and the value of the deutsche mark has been steadily growing since the 1950s. The exchange rate of the deutsche mark to the U.S. dollar fell from DM4.21 in 1955 to DM2.15 in 2001 (the lowest price for US$1 was reached in 1992-1995 at DM1.43). The currencies that gained against the deutsche mark after 1950 were Japan's yen and the Swiss franc. Since 1 January 1999, in accordance with provisions of the EU Maastricht Treaty, the European Monetary Union (EMU) was established and the Deutsche Bundesbank (the central bank) became an integral part of the European System of Central Banks consisting of the European Central Bank (ECB) and the central banks of the 11 EMU member states. The euro became the currency unit but was initially used in electronic transfers and for accounting purposes only. The deutsche mark remained as legal tender until the end of the year 2001, and in 2002 the new euro will replace it completely. On 1 January 1999 the exchange rate of the euro was fixed at DM1.9558. Monetary policy was also transferred to the ECB, its primary objective being to ensure price stability. In 2001 the most important function of the Bundesbank was to ensure the implementation of ECB monetary policy, including banking supervision and management of national monetary reserves, acting as the house bank of the federal government, overseeing payment transactions in Germany, and controlling the issue of euro notes.
In 1997 stock exchanges in Germany reached a turnover of DM8.97 trillion, 60 percent of which related to fixed interest securities (bonds) and the rest to shares. Trading was conducted on 8 exchanges (in Berlin, Bremen, Düsseldorf, Frankfurt am Main, Hamburg, Hanover, Munich, and Stuttgart), yet the Frankfurt exchange was
|Exchange rates: Germany|
|euros per US$1|
|Note: Amounts prior to 1999 are in deutsche marks per US dollar.|
|SOURCE: CIA World Factbook 2001 [ONLINE].|
|GDP per Capita (US$)|
|SOURCE: United Nations. Human Development Report 2000; Trends in human development and per capita income.|
the largest and ranked fourth internationally (after New York, Tokyo, and London). In 1992 the Deutsche Börse AG was founded in Frankfurt am Main as a holding company for the Frankfurter Wertpapierbörse (Frankfurt Securities Exchange), the German part of the German-Swiss futures exchange Eurex, and the Deutsche Börse Clearing AG, responsible for securities settlement and custody. Frankfurt is also the host of many local and foreign credit institutions, including major banks and brokerages.