The primary tasks and goals of the Golddiskontbank were to aid the restarting of the German economy by lending to support export trade and the purchase of raw materials and other goods; to generate the necessary funds for the Reich to pay for Treaty of Versailles reparations; and to ensure the stability of the German currency.
The Dego raised the necessary funds by conducting rediscount agreements abroad, and by lending its own share capital.
In order not to lose majority voting control, Reichsbank also acquired part of the B share package.
It claimed independence from political influence, and its business was to be subject to strict separation from public finances.
However, after the efforts of Reichsbank President Schacht, the business of the Golddiscount Bank was expanded, so that it was used to manage public money from the spring of 1927.
Although this was actually intended at the beginning by the Allied powers, which saw the Golddiskontbank only as a temporary solution pending creation of a currency bank, this did not happen.
In 1926, for example, the Golddiskontbank purchased medium-term Pfandbriefe (3–5 years) from the Rentenbankkreditanstalt at a very low interest rate.
From the end of that year, the Golddiskontbank also issued so-called sola bills to relieve the crowded short-term money market.
In this crisis year, a standstill agreement was concluded with foreign banks with the participation of the Golddiskontbank.
[3][4] The Dego also became associated with implementing the foreign exchange regulations imposed by the Nazis on Jewish refugees.
The Golddiskontbank, in turn, then exchanged the cash into foreign currency at a considerable discount to market prices.
Movable goods and other assets were only allowed to be brought abroad with the permission of the responsible foreign exchange office.
The authorization was only granted if a so-called Dego levy was paid to the Reich Ministry of Economics, which maintained an account with the Golddiskontbank for this purpose.
During the war, the Golddiskontbank continued to trade in solas, and it also increasingly took over price hedging transactions.
The shares became the property of the Bundesbank; the Oberfinanzdirektion Berlin was appointed to manage the remaining accounts of the former Golddiskontbank.