Press Release: Banking: Commission calls on Germany to modify its rules on use of the name ‘Sparkasse’

The European Commission on 28 June 2006 decided to ask Germany formally to modify its legislation (Article 40 of the 'Kreditwesengesetz') which provides that the name 'Sparkasse' (savings bank) may be used only by publicly-owned banks. The effect of this law is that a savings bank automatically loses the right to use the name 'Sparkasse' after privatisation. The Commission considered that this was in violation of EC Treaty rules on the freedom of establishment (Article 43) and free movement of capital (Article 56), because it prevents private investors from benefiting from the goodwill value of the name.