Frankfurt Stock Exchange — A Quiet Place!

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The roots of Frankfurt Stock Exchange go back to the period of medieval fairs. As early as the middle of the ninth century, Emperor Ludwig the German granted the city of Frankfurt the preferential right to hold an annual autumn fair.

In 1330, Frankfurt became an important center for commercial and monetary transactions. Emperor Ludwig the Bavarian expanded this privilege to include a spring fair as well.

Against specific customer orders, the goods manufacture gradually developed into merchandise production for an nationwide and open sales market. This was considered as a result of the trades occurring during the fair.

At the beginning of the 16th century, Luther termed the city "the silver and gold hole" of the German Empire. Merchants from all over Europe came to Frankfurt in order to engage in trade.

Since there was still no single currency, neither in the German Empire nor in Europe, payment was based on a large variety of coins. So, monetary transactions in Frankfurt proved to be extremely troublesome.

Frankfurt Stock Exchange

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To counter the deterioration of coinage, merchants at the fair met in 1585 in order to establish uniform exchange rates. Today, this event is regarded as the moment of the Frankfurt Stock Exchange's birth.

At the end of the 18th century, on the Frankfurt Stock Exchange began trading in government bonds. In 1779, Bankhaus Bethmann placed the first bond denominated in the millions for the German Emperor in Vienna. For the first time, this bank issued so-called fractional bonds in Frankfurt in order to be in a position to arrange this huge sum.

Anyone with funds could buy these securities at the bank. The investor thereby actually acquired part of the overall bond issue as well as the right to a share in the regular interest earnings. This instrument of capital mediation that was introduced by Bankhaus Bethmann made it possible for the Frankfurt banks to arrange large bond issues in the future.

In the years after 1871, Berlin was the capital of the newly founded German Empire and became host to the country's most important stock exchange. Nevertheless, on the basis of Frankfurt's good international contacts, Frankfurt was able to assert its international position and its role as a central stock exchange. The Frankfurt exchange could offer companies an alternative to Berlin for the raising of capital.

The 29 German stock exchanges were only subject to a uniform organization under the Stock Exchange Act of 1896. In addition, the previous local provisions applicable in Frankfurt gave way to a nationwide arrangement that has remained largely in effect down to this day.

The internationally oriented Frankfurt Stock Exchange was very hard hit by World War I and its consequences. Foreign shares and bonds were sold by German investors out of fear of instrumentalization by the opposing states.

By the end of the war, the international contacts of the Frankfurt Stock Exchange had been destroyed. All foreign securities had disappeared from German exchange lists. Stock market transactions only began restabilising during the twenties.

Following the collapse of the Nazi regime in 1945, the exchange remained initially closed for half a year. Nevertheless, it was already reopened in September 1945 as one of the first German stock exchanges.

The Frankfurt Stock Exchange gradually recovered its old appearance following the currency reform of 1948. Frankfurt returned to its tradition of international business and occupied the top position in Germany again.

In the late 50's, stock exchanges played an important role as capital intermediaries for the country's postwar reconstruction. Through their activity, they were also decisively involved in the subsequent economic miracle and the achievement of a top world economic position by the Federal Republic of Germany.

The rest is history...

If you want to know more, go to the website of the Frankfurt Stock Exchange.

What? You would like to know why the Frankfurt Stock Exchange is a quiet place? Hum, it's just besides the all-known floor trading (you surely remember screaming traders on television news, right?), the electronic trading system called Xetra was developed by Deutsche Börse. It is one of the leading electronic trading platforms world-wide.

The gripping point is, more than 90% of trading today goes electronically, without any screaming any more. Once you are here ask for a sightseeing tour they offer regularly and you'll feel it.

So, after all the money we'll now focus on sport events — the Frankfurt Stadium is our next stop.

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