Staatsbank

The State Bank of the GDR (German: Staatsbank der DDR) was the central bank of East Germany. It was established on 1 January 1968 from the Deutsche Notenbank and took over the majority of the same tasks.

The State Bank of the GDR was responsible for the administration of the internal account settlement and banking system, the issue of money and control of money circulation within the GDR, administration of the exchange control regulations and settlement of foreign currency accounts with overseas companies and governments (Zahlungsverkehr by transfer). In addition, the bank bought and sold financial securities and administered the purchase, sale and holding of precious metals for foreign exchange purposes.

The state bank was also responsible for the account processing of the state institutions and state enterprises, (Volkseigener Betrieb), having at least one main branch in each of the 15 administrative subdivisions of the German Democratic Republic.

Another key task of the State Bank (on which it expended considerable resources) was attempting to control the circulation of foreign exchange within the GDR This was primarily because of concerns that the circulation of foreign exchange (particularly the Deutschmark) could lead to the establishment of a parallel currency that would encourage the black market, damage the East German Mark and the internal economy, and undermine the international prestige of the GDR on its own soil.

Thus citizens of the GDR who were in the possession of foreign exchange (typically Deutschmarks sent by Western relatives or, for a small minority such as writers and artists, overseas royalties earnings) were obliged to deposit this in a dedicated foreign exchange account with the state bank. In order to encourage compliance, and thereby help “drain” the circulation of foreign currency from the economy, these accounts carried a 1% interest rate premium over the nationally determined fixed interest of 3.25% per annum paid on all other consumer saving accounts.

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