Thirty Years of the Deutschmark

Abstract

On 20 June 1948, the Reichsmark, which had been eroded by the war and the post-war disorder, was replaced by the newly created ‘Deutschmark’. In March 1948 the Bank Deutscher Länder was established by a law of the allied military authorities, as the first joint public institution of the three western zones of occupation. This common West German central bank was an essential prerequisite for the technical implementation of the currency reform. The reform itself, however, largely followed the conceptions of American experts and was the responsibility of the allied military government alone. The Bank Deutscher Länder, together with the Land Central Banks, was entrusted with looking after the new currency, that is, the issue of new money and monetary policy. It was thus made the ‘guardian of the currency’, a task that was passed on in 1957 to its legal successor, the Deutsche Bundesbank, on its creation by a German law.