How Fractional Reserve Banking is Robbing Us

[midwesterner (banned)]

Jefferson had a bit of prejudice built up vs bankers as he died insolvent and owing thousands.....

Well if that's not good enough for you, how about try on some of these famous men, sure you've heard of them before.

"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain."
Napoleon Bonaparte

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
Henry Ford

"The power to determine the quantity of money... is too important, too pervasive, to be exercised by a few people, however public-spirited, if there is any feasible alternative. There is no need for such arbitrary power... Any system which gives so much power and so much discretion to a few men, [so] that mistakes - excusable or not - can have such far reaching effects, is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic - this is the key political argument against an independent central bank."
Milton Friedman

"Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside of the control of Congress and manipulates the credit of the United States."
Barry Goldwater

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. ... This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."
Alan Greenspan

"Gold still represents the ultimate form of payment in the world."
Alan Greenspan

"The real menace of our Republic is the invisible government which like a giant octopus sprawls its slimy legs over our cities states and nation. At the head is a small group of banking houses generally referred to as 'international bankers.' This little coterie... run our government for their own selfish ends. It operates under cover of a self-created screen...[and] seizes...our executive officers... legislative bodies... schools... courts... newspapers and every agency created for the public protection."
John F. Hylan

"You are a den of vipers and thieves. I intend to rout you out, and by the grace of the Eternal God, will rout you out."
Andrew Jackson

"And Jesus went into the temple of God, and cast out all them that sold and bought in the temple, and overthrew the tables of the moneychangers, and the seats of them that sold doves, And said unto them, 'It is written, My house shall be called the house of prayer; but ye have made it a den of thieves.'"
Jesus of Nazareth

"Monetary policy today is guided by little more than government fiat -- by the calculations, often mistaken economic theories, and whims of central bankers or, even worse, politicians. Under such a regime, inflation of three or four percent annually has come to be viewed as a stellar monetary performance. However, under a more sound monetary system -- i.e., a gold standard -- such increases in the general price level would be seen as wildly inflationary."
Raymond J. Keating

"The Founding Fathers of this great land had no difficulty whatsoever understanding the agenda of bankers, and they frequently referred to them and their kind as, quote, 'friends of paper money.' They hated the Bank of England, in particular, and felt that even were we successful in winning our independence from England and King George, we could never truly be a nation of freemen, unless we had an honest money system. Through ignorance, but moreover, because of apathy, a small, but wealthy, clique of power brokers have robbed us of our Rights and Liberties, and we are being raped of our wealth. We are paying the price for the near-comatose levels of complacency by our parents, and only God knows what might become of our children, should we not work diligently to shake this country from its slumber! Many a nation has lost its freedom at the end of a gun barrel, but here in America, we just decided to hand it over voluntarily. Worse yet, we paid for the tyranny and usurpation out of our own pockets with "voluntary" tax contributions and the use of a debt-laden fiat currency!"
Peter Kershaw

"Once a nation parts with the control of its currency and credit, it matters not who makes the nations laws. Usury, once in control, will wreck any nation. Until the control of the issue of currency and credit is restored to government and recognized as its most sacred responsibility, all talk of the sovereignty of parliament and of democracy is idle and futile."
William Lyon Mackenzie King

"I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country; corporations have been enthroned, an era of corruption in High Places will follow, and the Money Power of the Country will endeavor to prolong its reign by working upon the prejudices of the People, until the wealth is aggregated in a few hands, and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war."
Abraham Lincoln

"This Act (the Federal Reserve Act, Dec. 23rd 1913) establishes the most gigantic trust on earth. When the President (Woodrow Wilson) signs the Bill, the invisible government of the Monetary Power will be legalised... The worst legislative crime of the ages is perpetrated by this banking and currency Bill."
Charles A. Lindbergh, Sr

"This Act establishes the most gigantic trust on earth. When the President signs this bill, the invisible government by the Monetary Power will be legalized. The people may not know it immediately, but the day of reckoning is only a few years removed. The trusts will soon realize that they have gone too far even for their own good. The people must make a declaration of independence to relieve themselves from the Monetary Power. This they will be able to do by taking control of Congress. Wall Streeters could not cheat us if you Senators and Representatives did not make a humbug of Congress... The greatest crime of Congress is its currency system. The worst legislative crime of the ages is perpetrated by this banking bill. The caucus and the party bosses have again operated and prevented the people from getting the benefit of their own government."
Charles A. Lindbergh, Sr

"In 1847, Marx and Engels proposed ten steps to convert the Western nations to Communist countries without firing a shot. Most of these ideas have been successfully implemented in our own country with little, if any, resistance! ... One of the ten steps called for "centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly" just like our own Federal Reserve! ... Another of the ten steps called for instituting "a heavy progressive or graduated income tax" just like our own federal income tax! ... Another step proposed by Marx and Engels was "abolition of all right of inheritance," which we come ever closer to as inheritance taxes increase. Taking wealth at gunpoint, if necessary that one person has created and given to another person is theft. Whether the wealth creator is alive or dead, the act and the impact are the same. Another step was "free education for all children in public schools." Although our country still has many private schools in addition to the public ones, the content of both is dictated by aggression-through-government, to teach aggression. Marx and Engels also recommended the "extension of factories and instruments of production owned by the state." In the past century, more and more services have become exclusive, subsidized government monopolies (e.g., garbage collection, water distribution, mass transit, etc.). As a result, we pay twice as much for lower quality service! Marx also called for the "centralization of the means of communications and transport in the hands of the state." Television and radio stations are licensed by the Federal Communications Commission. A station that does not pursue programming considered "in the public interest" is stopped at gunpoint, if necessary from further broadcast. ... Radio stations have an elite ownership as well. Those who benefit from aggression-through-government have little incentive to tell the public that licensing is a tool of the rich! ... Another of the ten steps calls for "confiscation of the property of all emigrants and rebels" ... [O]ur law enforcement agents can seize the wealth of anyone suspected of drug crimes without a trial! [T]he Internal Revenue Service (IRS) has also been seizing the assets of taxpayers without a trial if the IRS thinks they might have underpaid their taxes! The wealth we have created can be taken from us at gunpoint, if necessary without a formal accusation or a chance to defend ourselves! ... In addition, Marx and Engels called for "abolition of property in land and application of all rents of land to public purposes." In other words, land would not be privately owned. No homesteading would be permitted. Our federal and local governments have title to 42% of the land mass of the United States. Most of the remaining land is under government control as well. For example, today's homeowners can pay off their mortgages, but must still pay property taxes to the local government. If they stop payments, their property is taken from them. They are, in essence, renting their home from the local government."
Dr. Mary J. Ruwart

"The death of Lincoln was a disaster for Christendom. There was no man in the United States great enough to wear his boots and the bankers went anew to grab the riches. I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America and use it to systematically corrupt civilisation."
Otto von Bismarck

"We have restricted credit, we have restricted opportunity, we have controlled development, and we have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world--no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men."
Woodrow Wilson

Shall I continue???

[kman]

I completely agree with regards to PMI

[Deleted]

Just a couple of points. As for the PMI, well the person with the money makes the rules that the borrower has to follow to get the money. Do I agree with PMI. NO but those are the rules. (I've never had to pay it). I look at a house contract as a time payment where you get to use the item until it's paid for. If you don't fulfill your part of the deal then the bank gets the house back. I see nothing wrong with that. If it were me & I had loaned the money I would sure want my property back & don't forget that there is a risk that it could be damaged.
As far as the banks not really having the money, I don't really know one way or another about that. I do know that very few banks hold only those mortgages that they have written & are in their area (because that would be stupid & very costly if the area went under, like Detroit). I have to assume that money changes hands when they sell those mortgages to other companies.

[midwesterner (banned)]

Just a couple of points. As for the PMI, well the person with the money makes the rules that the borrower has to follow to get the money. Do I agree with PMI. NO but those are the rules. (I've never had to pay it). I look at a house contract as a time payment where you get to use the item until it's paid for. If you don't fulfill your part of the deal then the bank gets the house back. I see nothing wrong with that. If it were me & I had loaned the money I would sure want my property back & don't forget that there is a risk that it could be damaged.

The point of a business, bank or other operation is to produce profit. So when you go into a bank and looking to get a loan, but don't have the 20% to put down, the banker writing the loan has to look at a few things. Risk vs. Reward. Is this person looking for the loan reasonably going to be able to pay it back, do they have a job, have they had a steady job or continued employment, do they make enough to cover payments? I'm sure there are many more questions to ask, so based on the information they get a loans interest rate reflect the risk vs reward factor. Why is it then that if there is a risk involved just like in any business venture the banks get special treatment in having the consumer pay for the insurance of the decisions they made to make a loan? It's complete fraud, and downright wrong. In my example above with the fractional reserve banking, they are already making more than a killing on the loan principle, which is profit back to, but tacked on interest payments which again is double profit. I don't think they need to be forcing individuals to put 20% down or pay for the insurance so bank doesn't default. That's the banks business decision, and if they feel it's unreasonable then loan should not be made.

[bimetalaupt]

Jan 18, 2011 13:45:57 GMT -5 bimetalaupt said:

Jan 18, 2011 12:56:31 GMT -5 robinking said:

Mid,

I agree with you. I don't know where we'd be as a society right now had we kept banking under control. But, many believe the wealth explosion last century was due to cheap energy and not cheap money. All cheap money has done is erode savers ability to save. It has punished the thrifty and forced them to gamble in the markets. The stock market had a great run, but now it's purely a PONZI, similar to Social Security... just people don't see it yet. Without the FED's admitted intervention, the market would have crashed as Flow predicted. All bets are off now, as reason has been abandoned. The market could triple this year, but what good is it if food prices go up 5 times? I see your reasoning and applaud the effort to expose banking for what it is, a SCAM! I believe bankers have a right to make money, but when it's guaranteed similar to a casino... then they need to pay much higher taxes. Multi-million dollar bonuses based upon guaranteed returns is wrong.

Robin,
Yes but I have a old friend that used to own the majority of stock in an very old fashion farming bank. He told me the large noney central banks made more money on their equity (ROE) then small banks did because they too more risk. NIP used to joke with me on my MBA in finance.. He told me i needed real world experience not a fancy Ivy League Sheep skin.

Funny thing was He learned banking from an AIB classes thought my my father in Midland. It was interesting to note the numbers of President in Credit Unions and Banks my father thought.. My father thought banking is all about "TRUST". Like trust in your correspondent banks and bankers...etc.. Miss that today as I have missed my father.. +

There is one option most farmers have as swell as teachers.. The local Credit Union. Over the last 15 years in West Texas Credit Unions have gained a huge market share of the small accounts.. The ones that had cost banks money to maintain. It is funny about how little our M2 has grown.. This is all about banking and the small saving account. We saw the same in japan from 1990 to 2010.. Huge increase in monetary base with little increase in M2.. The effect of QE has been and will in all likelihood be disappointing. Please see chart..this is Japan but I think we have the same dynamics. The bottom line is the price of the gold in the New York Federal Reserve bank that is owned by the Federal Reserve is growing faster then the monetary base. If we increase reserves on checking accounts more people will just go to savings account with debit cards: lower Factional reserve requirements so banks can lend more of the monies. If they will
The Truth will set you free

[/img]
The best thing to do per James Bullard, Thomas Hoenig and Axel Weber would be to raise interest rates to encourage savings for more M2.. There is a new dynamic for America.

Just a thought,
Bi Metal Au Pt[/quote]

[vl]

A few things from a Lender...

Regarding the amortization lesson... we have electronic banking but it is skewed to the bank, not the borrower. If I could, I'd prefer to have my payments taken DAILY as to reduce my total interest by about 75%. Banks are in it for the money yet start with a discount that gives them unfair advantage. If they won't change-- get rid of them.
Regarding Private Mortgage Insurance (PMI). Again... skewed to a bank. If you don't default, you just paid an extra percent or two in nebulously disclosed premiums. If you do default, an insurance policy comps the bank. Where is the Risk?
Fractional Reserves... I'll throw two things out at the group... ONE: it used to be that there was a 115% credit extended to cash on hand requirement. TWO: we also used to to lend fixed rate with full documentation. BOTH are components of the same argument. IF we re-mandated ONE, we would wipe out every major bank because less than 50% of America use banks, they aren't trustworthy. IF we returned to TWO, inflation would be in forced check and balance and major banks would be wiped out because the overhead of Too Big To Fail is TOO MUCH.

Everything happening to us is happening because of banks. We should close them and move on to financial segregation, state charters and proper regulation with oversight.

[midwesterner (banned)]

Fractional Reserves... I'll throw two things out at the group... ONE: it used to be that there was a 115% credit extended to cash on hand requirement. TWO: we also used to to lend fixed rate with full documentation. BOTH are components of the same argument. IF we re-mandated ONE, we would wipe out every major bank because less than 50% of America use banks, they aren't trustworthy. IF we returned to TWO, inflation would be in forced check and balance and major banks would be wiped out because the overhead of Too Big To Fail is TOO MUCH.

Everything happening to us is happening because of banks. We should close them and move on to financial segregation, state charters and proper regulation with oversight.

Veteran Lender, could you or anyone else explain this a little further in detail or if you have an article about this. This is interesting but I'm not sure if I fully understand exactly what you mean.

[midwesterner (banned)]

Here is an interesting article I wanted to share on the bank of North Dakota. Many see this is a good model for other states. Not sure if I know enough about this, but putting it out there so others can comment. Maybe this model is a partial solution to the private owned banking cartel and the credit crisis?

How the Nation’s Only State-Owned Bank Became the Envy of Wall Street

motherjones.com/mojo/2009/03/how-nation%E2%80%99s-only-state-owned-bank-became-envy-wall-street

The Bank of North Dakota is the only state-owned bank in America.
Could opening state-owned banks across America get us out of the financial crisis? It certainly might help, says Ellen Brown, author of the book, Web of Debt, who writes that the Bank of North Dakota, with its $4 billion under management, has avoided the credit freeze by “creating its own credit, leading the nation in establishing state economic sovereignty.

Mother Jones: How was the bank formed?

Eric Hardmeyer: It was created 90 years ago, in 1919, as a populist movement swept the northern plains. Basically it was a very angry movement by a large group of the agrarian sector that was upset by decisions that were being made in the eastern markets, the money markets maybe in Minneapolis, New York, deciding who got credit and how to market their goods. So it swept the northern plains. In North Dakota the movement was called the Nonpartisan League, and they actually took control of the legislature and created what was called an industrial program, which created both the Bank of North Dakota as a financing arm and a state-owned mill and elevator to market and buy the grain from the farmer. And we’re both in existence today doing exactly what we were created for 90 years ago. Only we’ve morphed a little bit and found other niches and ways to promote the state of North Dakota.

MJ: What makes your bank unique today?

EH: Our funding model, our deposit model is really what is unique as the engine that drives that bank. And that is we are the depository for all state tax collections and fees. And so we have a captive deposit base, we pay a competitive rate to the state treasurer. And I would bet that that would be one of the most difficult things to wrestle away from the private sector—those opportunities to bid on public funds. But that’s only one portion of it. We take those funds and then, really what separates us is that we plow those deposits back into the state of North Dakota in the form of loans. We invest back into the state in economic development type of activities. We grow our state through that mechanism.

MJ: Clearly other banks also invest their deposits. Is the difference that you are investing a larger portion of that money into the state’s own economy?

EH: Yeah, absolutely. But we have specifically designed programs to spur certain elements of the economy. Whether it’s agriculture or economic development programs that are deemed necessary in the state or energy, which now seems to be a huge play in the state. And education—we do a lot of student loan financing. So that’s our model. We have a specific mission that was given to us when we were created 90 years ago and it guides us throughout our history.

MJ: What do private banks think of you?

EH: The interesting thing about the bank is we understand that we walk a fine line between competing and partnering with the private sector. We were designed and set up to partner with them and not compete with them. So most of the lending that we do is participatory in nature. It’s originated by a local bank and we come in and participate in the loan and use some of our programs to share risk, buy down the interest rate. We even provide guarantees similar to SBA to encourage certain activity for entrepreneurial startups. Aside from that, we also act as a bankers’ bank or a wholesale bank. So we provide services to banks, whether it’s check clearing, liquidity, or bond accounting safekeeping. There’s probably 20 other bankers' banks across the country. So we act in that capacity as kind of a little mini-fed actually. And so we service 104 banks and provide liquidity to them and clear their checks and also we buy loans from them when they have a need to overline, whether it’s beyond their legal lending limit or they just want to share risk, we’ll do that. We’re a secondary market for residential loans, so we have a portfolio of $500 to $600 million of residential loans that we buy.
MJ: So what’s the advantage of a publicly owned “bankers’ bank” instead of a privately owned one?

MJ: If other states had a bank like yours, do you think they would have been more insulated from the credit crisis?

EH: It all gets down the management and management philosophy. We’re a fairly conservative lot up here in the upper Midwest and we didn’t do any subprime lending and we have the ability to get into the derivatives markets and put on swaps and callers and caps and credit default swaps and just chose not to do it, really chose a Warren Buffett mentality—if we don’t understand it, we’re not going to jump into it. And so we’ve avoided all those pitfalls. That’s not to say that we’re completely immune to everything, certainly we’ve bought some mortgage-backed securities and we’re working through some of those issues, but nothing that would cause us to be concerned.

MJ: Are other states interested in your model?

EH: In my stint here as president, which as been about 9 years now, I’ve had a lot of inquiries from other states about how this works, could it work for them. And my predecessor, who is now the governor of the state of North Dakota, has in fact testified at a couple of other state legislatures in terms of setting up the same model. Up until a year or two ago I would have bet that it would never happen.

[Virgil Showlion]

Just a reminder from ZH that monetization is expensive.

Ok this is it. Someone (preferably of the less than multi-millionaire Wall Street marionette variety) in Congress has to look into the blatant bond churn-semen-flip (that was happening behind the scenes a few months ago and is now so blatantly in your face it is a slap to all US taxpayers) which has the Fed paying Primary Dealers billions in commissions for a trade that has absolutely no value added. And while we have been complaining about this for months, today just takes the cake. Below we present the entire list of permitted issues to be monetized by Frosty-Sack. Note that there were 29 CUSIP eligible for buybacks. What happened - the Primary Dealers flipped virtually the entire operation in the form of the just auctioned off 3 Year PQ7! This is half the entire Primary Dealer allocation in the bond auction that was completed on January 11 (whose technical original issue date was yesterday). One more 3 Year POMO, the next of which is on January 31, in which PDs flip a like amount, and the Fed will have monetized the entire auction, but in the process having paid at least a few hundred million of taxpayer capital to the PDs for absolutely no value added! This is a daylight robbery and has to stop.

Who knew inflation was so costly to implement?

[bimetalaupt]

Mid,
Great Item.. I had published on the old MSN some things on the Bank of North Dekota that was in some ways the model for the Marshal plan bank in Germany for KfW. One of Germans safest Banks.
Here is an interesting article I wanted to share on the bank of North Dakota. Many see this is a good model for other states. Not sure if I know enough about this, but putting it out there so others can comment. Maybe this model is a partial solution to the private owned banking cartel and the credit crisis?

Read more: notmsnmoney.proboards.com/index.cgi?board=moneytalk&action=display&thread=1831&page=2#ixzz1BWFgnOoM
KfW
From Wikipedia, the free encyclopedia
Jump to: navigation, search
KfW Bankengruppe Type Federal Agency
Industry Financial services
Founded 1948
Headquarters Frankfurt, Germany
Products Housing finance, small and medium enterprise finance, export finance, import finance, foreign investment finance, development aid
Revenue €70.6 billion (2008)[1]
Employees 4,228 (2008)[1]
Website www.kfw.de

KfW banking group is a German government-owned development bank, based in Frankfurt. Its name originally comes from Kreditanstalt für Wiederaufbau, meaning Reconstruction Credit Institute. It was formed in 1948 after World War II as part of the Marshall Plan.

It is owned by the Federal Republic of Germany (80%) and the States of Germany (20%). [2] It is led by a five-member Managing Board headed by Ulrich Schröder, which in turn reports to 37-member Supervisory Board chaired by Rainer Brüderle, Federal Minister of Economy and Technology, since October 2009. [3]

KfW banking group covers over 90% of its borrowing needs in the capital markets, mainly through bonds that are guaranteed by the federal government. This allows KfW to raise funds at advantageous conditions. Together with its exemption from corporate taxes due to its legal status as a public agency and unremunerated equity provided by its public shareholders, this allows KfW to provide loans for purposes prescribed by the KfW law at lower rates than commercial banks. KfW is not allowed to compete with commercial banks, but it facilitates their business in areas within its mandate. Typically, KfW does not lend directly to enterprises or individuals, but it provides commercial banks with liquidity at low rates and long maturities, as well as with instruments to transfer risk (securitization). KfW thus acts as a second-tier bank. KfW banking group has three business units with distinct functions, as well as several subsidiaries. Lending by KfW group’s two main business units, accounting for more than 90% of total lending, is in Germany and – to a more limited extent – in other European countries. However, its largest subsidiary, KfW IPEX Bank GmbH, lends predominantly internationally. A smaller subsidiary, the German Investment Corporation (DEG), and one of the group’s smaller business units, KfW development bank, are exclusively active in the international arena, each within their particular business areas.

Housing and Environment. KfW Förderbank (KfW promotional Bank), the largest business unit of the group, committed EUR 33.8 billion in 2008, mostly for housing and environmental protection in Germany. [4] It is especially active in promoting energy-efficient housing for owner-occupied houses as well as for landlords, both for new houses and refurbishments. Its energy efficiency standards for houses (KfW-60 and KfW-40) have become accepted standards in Germany. Concerning environmental protection, it promotes, among others, photovoltaic energy (solar cells) which has in turn received massive indirect subsidies through feed-in tariffs under the Renewable Energy Law of 2000. It also invests in municipal infrastructure such as public transport and sanitation through a sub-unit called KfW Kommunalbank (KfW municipal bank). More recently, it has also engaged in education where it provides student loans.

Small and medium enterprises. KfW Mittelstandsbank (which roughly translates as KfW small and medium enterprises bank), the second largest business unit of the group, provides assistance to German small and medium enterprises (SMEs) including individual entrepreneurs and start-ups. In addition to loans it also provides equity and mezzanine financing. Its financing totaled Euro 14.3bn in 2008.[4]

KfW has been very active in securitization before this market collapsed during the subprime mortgage crisis. Through securitization it helped commercial banks to transfer risks from their housing and SME portfolios to the capital market. KfW also provides loans to European commercial banks to help them finance small and medium enterprises, housing and infrastructure (so-called global loans).

Development aid. KfW Entwicklungsbank (KfW Development Bank) provides financing to governments, public enterprises and commercial banks engaged in microfinance and SME promoption in developing countries. It does so through loans close to market terms using its own resources (so-called promotional loans), soft loans that blend KfW resources with support from the federal government’s aid budget (so-called development loans), as well as highly subsidized loans and grants, the latter two coming entirely from the federal aid budget. Different country groups are offered different financing conditions depending mainly on their per capita income. All these financing instruments are part of what is officially called development cooperation and is more commonly called development aid. In German aid, the work of KfW Development Bank is called “financial cooperation” which is complemented by “technical cooperation” by GTZ and other public agencies. The main sectors of financial cooperation are water supply and sanitation, renewable energy and energy efficiency, as well as the development of the finncial sector. KfW development bank also works, among other sectors, in health, education, agriculture, forestry, solid waste management. It provided Euro 3.7bn in loans and grants in 2008.[4]

Export and import finance. The largest subsidiary of KfW banking group is the IPEX Bank. IPEX Bank is active in project finance and corporate finance related to German or European exports. It also promotes foreign investments in Germany. Unlike KfW banking group itself, it is in direct competition with commercial banks. Therefore, and in response to concerns voiced by the European Commission concerning unfair competition, IPEX Bank has become legally and financially independent in 2008. It thus does not any more benefit from the federal loan guarantees that allow KfW banking group to refinance itself at advantageous rates. IPEX Bank’s main sectors of activity are ports, airports, toll roads, bridges and tunnels, railways, ships, planes, telecommunications, energy and manufacturing. IPEX Bank had a lending volume of Euro 17.6bn in 2008.[4]

Another subsidiary of KfW banking group, the German Investment Corporation (DEG), takes minority equity stakes and provides loans to private companies investing in developing countries. It pursues a business model broadly similar to that of the International Finance Corporation of the World Bank Group. Its main sectors of activity are banking, agro-business, renewable energy, telecommunications and manufacturing. It lent 1.2bn. in 2008.[4]

The magazine Global Finance rated KfW as the safest bank in the world in its "World’s 50 Safest Banks 2009" rating. The rating is based on long-term foreign currency ratings from Fitch Ratings and Standard and Poor’s and the long-term bank deposit ratings from Moody’s Investors Service.[5]