The hundreds of savings banks and more than 1000 co-operative banks have neither incentive nor inclination for reform. They survived the crisis in good shape and needed no help from local or federal government. Indeed, it was they who were called upon to help their local landesbanken, the regionally owned wholesale banks that have proved so accident-prone over the years.
Landesbanken have a history of problems, from Bankgesellschaft Berlin, which nearly collapsed in 2001 when a revaluation of its property-related liabilities erased its entire capital base, to the current financial crisis, when nearly half of the sector has required significant public or parental support. All this means that Berlin has had enough and is keen for change.
