Internal financing (in-house banking)

Corporations provide loans to their affiliated companies; however, these are not considered banks in Germany under Section 2 (1) of the German Banking Act even if they engage in other banking activities within the group; companies provide loans to their suppliers and, conversely, suppliers sometimes also provide loans to their customers; retail chains provide loans to their retailers; and retailers provide loans to their customers. – Such direct lending fundamentally reduces the central bank’s influence on money flows. – See disintermediation, in-house system, group bank. – Cf. Monthly Report of the Deutsche Bundesbank of January 2012, pp. 13 et seq. (detailed presentation of domestic financing; overviews).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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