'German Federal Bank', colloquially Buba,[2] sometimes alternatively abbreviated as BBk or DBB) is the German member of the Eurosystem and has been the monetary authority for Germany from 1957 to 1998, issuing the Deutsche Mark (DM).

This made the German Mark one of the most respected currencies, and the Bundesbank gained substantial indirect influence in many European countries.

[citation needed] As of 2023, its balance sheet total was €2.516 trillion,[4][5] making it the 4th largest central bank in the world.

[7] The legislature fulfilled this obligation by passing the Bundesbank Act (BBankG) of 26 July 1957, which abolished the two-tier structure of the central bank system.

The Central Bank Council decided on the currency and credit policy and laid down rules for management.

The Bundesbank Act explicitly made them responsible for dealings with public bodies and credit institutes.

The central Banks of the Länder also controlled the subsidiary bodies (Zweiganstalten), now called branches (Filialen).

The Maastricht Treaty that came into force on 1 November 1993 laid the foundation for the European Economic and Currency Union (EECU).

Since 1 January 1999, one of the principal aims of the ECB has been to maintain price stability by means of its monetary strategy.

The Bundesbank supports cross-border payments between domestic and foreign commercial banks, for instance by means of the German real time gross transfer system RTGSplus and, since 2007, through its participation in the Eurosystem's TARGET Services.

All such accounts are required to have a positive balance, i.e. the Bundesbank is not allowed to grant credits to the public sector.

This is due to negative historical precedents in connection with the financing of two world wars by the Deutsche Reichsbank.

Currency reserves can be invested for profit and also provide a possibility of intervening in the market if the exchange rate fluctuates strongly.

[14] These are available to banks, public authorities and money transport enterprises for the provision of cash and the clearing of credit transfer.

The Bundesbank feared that this would be excessively inflationary as well as very significantly impairing the economic prospects of the area of the former East Germany.

[17] In 2004 the president of the Bundesbank, Ernst Welteke, resigned after the press published allegations that his hotel bills for a New Year celebration had been paid by a commercial bank and he was criticized for his handling of the affair.

There were also some allegations that this was part of a political intrigue to remove Welteke from office because he opposed selling Bundesbank gold reserves, as desired by the government.

[18][19] On Wednesday, 24 February 2016, as part of the Bundesbank's annual news conference, Bundesbank president and European Central Bank Governing Council member, Jens Weidmann, dismissed deflation in light of the ECB's current stimulus program, pointing out the healthy condition of the German economy and that the euro area isn't that bad off, on the eve of the 9–10 March 2016 meetings.

[20] In June 2012, it was estimated that the Bundesbank had €644 billion exposure to other central banks in the eurozone under the TARGET2 payment system.