A bank is a financial institution that offers deposit and credit services to the public, and can execute indirect or direct lending activities. Given the need to ensure financial stability, banks are often subject to government restrictions, and most countries require banks to hold liquid assets and a portion of their existing liabilities in equal portions. Types of banks include commercial banks, which deal with making deposits and loans for large organizations, co-operative banks, which offer short and long-term credit services for agricultural functions, and central banks, which offer regulatory services for the financial system of the country. Other types of banks include industrial banks, savings bank, foreign exchange banks, and private banks. According to Global Finance, KfW in Germany is ranked as the world’s safest bank. Zürcher Kantonalbank in Switzerland is ranked the second safest bank, followed by Landwirtschaftliche Rentenbank and L-Bank, both also German. These top-ranking banks are highlighted in further detail below.
The Most Secure Banks in the World
KfW is a development bank based in Frankfurt, Germany, and is owned by the German government. Formerly known as KfW Bankengruppe, the bank's name, KfW, is derived from Kreditanstalt für Wiederaufbau which means "reconstruction credit institute." The bank was established in 1948, as part of the Marshall Plan, which provided economic aid to help rebuild Western Europe after World War II. Globally, KfW is rated the safest banks because of its long-lasting foreign currency ratings.
Zurich Cantonal Bank
Zurich Cantonal Bank, known as Zürcher Kantonalbank in German or abbreviated as ZKB, is based in Zurich, Switzerland. The bank is owned by the Canton of Zurich, one of 26 member states of the Swiss Federation, and supervised by the Cantonal Council of Zurich. The Swiss bank is ranked as the second safest in the world because it is among five financial organizations that have been awarded a AAA global rating from the "Big Three" credit rating agencies: Standard & Poor's, Fitch, and Moody's.
Rentenbank, or Landwirtschaftliche Rentenbank, is a bank based in Munich, Germany. It is a development bank for rural areas and agricultural businesses, and provides a wide range of investments due to its low-interest credit. Rentenbank is ranked as the third safest bank because it has been awarded the highest ratings by the "Big Three" credit rating agencies.
The L-Bank, also known as Landesbank Baden-Württemberg, was founded in 1999 through a merger with SüdwestLB and Landesgirokasse. L-Bank is a commercial bank as well as a Landesbank, which are state-owned German banks that specialize in wholesale banking. The bank's services include asset management, private banking, investment banking, and commercial banking. L-Bank is ranked is as the fourth safest bank in the world.
Globalization and Banking
Advances in techology and telecommunications have resulted in the greater globalization of banking. By removing previous time and space barriers, the banking industry can expand across borders and reach new markets. For example, this globalization creates potential for developing countries to expand their economies. However, the globalization of banking also poses the risk of financial crises, such as the global financial crisis of 2007-2008.