Open-End Real Estate Funds in Germany: Genesis and Crisis

44 Pages Posted: 8 Jun 2016

See all articles by Christina E. Bannier

Christina E. Bannier

Justus-Liebig-University Giessen

Falko Fecht

Deutsche Bundesbank; Frankfurt School of Finance & Management

Marcel Tyrell

Zeppelin University

Date Written: 2007


Open-end real estate funds are of particular importance in the German bank- dominated financial system. However, recently the German open-end fund industry came under severe distress which triggered a broad discussion of required regulatory interventions. This paper gives a detailed description of the institutional structure of these funds and of the events that led to the crisis. Furthermore, it applies recent banking theory to openend real estate funds in order to understand why the open-end fund structure was so prevalent in Germany. Based on these theoretical insights we evaluate the various policy recommendations that have been raised.

Keywords: Open-End Funds, Liquidity Transformation, Liquidity Crisis, Risk Sharing

JEL Classification: G28, G23

Suggested Citation

Bannier, Christina E. and Fecht, Falko and Tyrell, Marcel, Open-End Real Estate Funds in Germany: Genesis and Crisis (2007). Bundesbank Series 2 Discussion Paper No. 2007,04, Available at SSRN: or

Christina E. Bannier (Contact Author)

Justus-Liebig-University Giessen ( email )

Licher Str. 62
Gießen, 35394
+49 641 99 22551 (Phone)

Falko Fecht

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
+4969956632312 (Phone)

HOME PAGE: http://

Frankfurt School of Finance & Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322

Marcel Tyrell

Zeppelin University ( email )

Am Seemooser Horn 20
Friedrichshafen, Lake Constance 88045

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