Banks and the Era of Totalitarianism: Banking in Nazi Germany

An assessment of the role of banks in the Europe of the 1930s, of their strengths, of their room for manoeuvre, needs to recognize that this was an era dominated by two trends: toward authoritarian or totalitarian policies, and a world of economic depression, in which financial failures and bank panics played an especially significant part. It is difficult to distinguish clearly in the story of Germany’s way out of depression and into the economics of control quite what followed more or less inevitably from the financial and economic catastrophes of the Depression, and what originated from the political vision of the new masters of Germany. From 1933, holdings of securities shown in the bank’s balance sheet rose. As the traditional business of the banks in taking business deposits and extending commercial credit contracted, their position within the German economy was diminished. In addition, traditionally a major strength of the German Great Banks had lain in overseas financing.