!!!Banken

Banks are institutions which are entitled, under special federal 
regulations, to carry out banking transactions. These include 
classical banking activities, such as deposit and lending business, as 
well as giro business (a bank´s transactions dealing with 
payments by cheque or credit transfer, and settlement of accounts), 
foreign exchange business, dealing in foreign notes and coin, issuing 
of securities and a number of other activities, to the extent that 
they are carried out as commercial activities.

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The interests of the Austrian credit institutions are represented by 
the Austrian Economic Chamber (finance, credit and insurance 
division), and, depending on their field of activity, by one of the 
professional associations of credit institutions, the Association of 
Austrian Banks and Bankers (Verband oesterreichischer Banken und 
Bankiers) the Austrian Savings Banks Association (Oesterreichischer 
Sparkassenverband), the Austrian Co-operatives Association 
(Oesterreichischer Genossenschaftsverband), the Austrian Raiffeisen 
Association (Oesterreichischer Raiffeisenverband) and the Association 
of Austrian Provincial Mortgage Banks (Verband der oesterreichischen 
Landes-Hypothekenbanken).

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Austrian credit institutions are regulated in the Banking Law and, 
depending on the specific sphere of business, in other relevant laws, 
such as the unit trust law, the capital market law and the mortgage 
bond law. Savings banks (Sparkassen) and state-regulated building 
societies (Bausparkassen) are, for instance, not only regulated by the 
Banking Law, but also by the Savings Bank Law and the Building Society 
Law, respectively. The Postal Savings Bank  Postsparkasse has a 
specific legal basis, and its sphere of business is for the most part 
regulated by the Postsparkasse law.

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The beginnings of the Austrian banking system can be traced back to 
the 18%%sup th/%  century. In 1762, the Wiener Stadtbank (Vienna City 
Bank) was conferred the right to issue the first Austrian bank notes. 
After the national bankruptcy in 1811, the "Privileged Austrian 
National Bank" was founded in 1816 as a private institute to 
administer the national debt. Changing economic and regional 
requirements in the 19%%sup th/%  century led to the development of 
varied types of financial and credit institutions, such as joint-stock 
banks, real-estate credit institutions, mortgage banks and credit 
co-operatives. The beginning of the 19%%sup th/%  century also saw the 
development of a number of private banks and the foundation of the 
first Sparkassen (savings banks) (e.g.  Erste oesterreichische 
Spar-Casse, 1819). The Creditanstalt fuer Handel und Gewerbe/Credit 
Institution for Commerce and Trades ( Creditanstalt-Bankverein AG) was 
founded in 1855, the k. k. privileged Oesterreichische 
Laenderbank in 1880 and the K. k. Postsparkassenamt in 1883. 
Various  Agricultural Cooperatives, which later became  Consumer 
Cooperatives were set up in the late 19%%sup th/%  century. 
Professional associations were founded toward the end of the 
19%%sup th/%  century, first by the agricultural co-operatives, and 
later on by various consumer co-operatives.

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The dissolution of the Danube (Habsburg) Monarchy and World War I 
caused a decline in banking (for example, the collapse the Allgemeine 
Oesterreichische  Bodencreditanstalt in 1929). Many banks had to close 
down, and in 1938 the number of joint stock-banks and bankers had 
shrunk to some 70.

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The time between the two World Wars saw the creation of 
Austria´s leading modern multistage financial institutes, such 
as the Zentralkasse der Volksbanken (Central Institution of 
People´s Banks) (which is now the  Oesterreichische 
Volksbanken-AG), the Girozentrale of the Oesterreichischen 
Genossenschaften (today the  Raiffeisen Zentralbank Oesterreich AG, 
Central Institution of the Raiffeisen Banking Group and the 
Giro-Zentrale and Bank of the oesterreichische Sparkasse AG (from 
1992-97 the  GiroCredit Bank AG, since 1997  Erste Bank der 
oesterreichischen Sparkassen AG). Following Austria´s occupation 
by German troops in 1938, Austria´s big banks were put under the 
control of the Deutsche Bank and the Dresdner Bank.

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After World War II, the First Nationalisation Act of July 26, 
1946 ( Nationalisation), provided for the nationalisation of 
Austria´s three biggest credit institutions 
(Creditanstalt-Bankverein, Oesterreichische Laenderbank and 
Oesterreichisches Credit-Institut), which were to be organised as 
joint-stock banks. The 1955 Reconstruction Act enabled banks to adjust 
their balance sheets by the end of the 1954 business year. The banks, 
which had been unable to draw up and publish their balance sheets 
since 1945, were now able to conduct their business as usual, and 
disclosure of business data was fully restored. From 1956 to 1957, 
Austria´s then Minister of Finance, R.  Kamitz, provided for a 
partial privatisation of the two largest banks, 
Creditanstalt-Bankverein and Oesterreichische Laenderbank by the 
issuance of ordinary shares and non-voting preference shares totalling 
40 per cent of the banks´ basic capital. In addition, new 
specialised banks were created after World War II. Among these 
were the Oesterreichische  Kontrollbank AG, 1946, the Oesterreichische 
 Investitions Kredit AG, 1957 and the Oesterreichische  Kommunal 
Kredit AG, 1958. During the 1960s and 1970s a number of foreign banks 
established branches in Austria (City Bank Austria, Bank of America, 
Chase Manhattan Bank, Centro Internationale Handelsbank AG and 
others).

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Historical differences and peculiarities lost their importance with 
the establishment of universal banking by the Banking Law of 1979, 
which also made banking transactions contingent upon licence. The 
security of money entrusted to credit institutions is guaranteed by a 
number of administrative regulations, such as rules on sufficient own 
funds, on credit transactions and bank supervision. In addition, bank 
customers are protected by mechanisms safeguarding depositor´s 
accounts.

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European Union legal standards were implemented when Austria joined 
the  European Economic Area. This meant that credit institutions from 
within the European Economic Area were granted the freedom to provide 
services and the freedom of establishment. The greatest efforts, 
however, had to be undertaken in adjusting norms of administrative 
rules: Provision of own funds was made dependent on the individual 
risk of the debtor, and own funds had to be broken down into core and 
supplementary capital.

\\
 Bank Austria AG,  Bank fuer Arbeit und Wirtschaft AG,  Bank fuer 
Kaernten und Steiermark AG,  Bank fuer Tirol und Vorarlberg AG,  
Landes-Hypothekenbanken,  Oberbank AG,  Raiffeisenkassen,  Sparkassen.

!Literature
K. Ausch, Als die Banken fielen, 1968; K. Socher et al. 
(eds.), Finanzplatz Oesterreich, 1990; H. Kernbauer, Waehrungspolitik 
in der Zwischenkriegszeit, 1991; S. Augustin (editor), 
Bankwesengesetz, 1994; H. Lexa et al. (eds.), Die Herausforderung der 
Kreditinstitute in einem grossen europaeischen Markt, 1994; M. 
Eiselsberg (ed.), Bundesgesetz ueber das Bankwesen, %%sup 2/%1997; R. 
Borns, Das oesterreichische Bankrecht, 1999.


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