Wars, reconstruction, the computer age and cross-border growth: 20th century
History of the Frankfurt Stock Exchange
The internationally oriented FWB® Frankfurter Wertpapierbörse (the 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 warring states; freed up capital was invested mostly in government bonds. By the end of the war, all foreign securities had disappeared from German exchange lists, as a result of which Frankfurt lost its standing as an international stock exchange. By the end of the war, the international contacts of the Frankfurt Stock Exchange had been lost. Inflation set in and reached its peak in 1923. The stock exchange saw unprecedented losses in securities of monetary value. By contrast, demand for stocks as speculation objects sharply increased. In October 1929, however, stock exchange prices fell dramatically and 25 October 1929 made history as “Black Friday”. The world economic crisis ruled the following years. The economy only began to restabilize in 1932.
With the Nazi takeover in 1933, overall economic policy was incorporated into the general government and war policy. Stock exchange supervision was taken away from the states and made the domain of the central government, with the number of stock exchanges reduced from 21 to 9. The Frankfurt Stock Exchange incorporated the Mannheim Stock Exchange in 1935. The merged institution was called the Rhine-Main Stock Exchange. Although the Frankfurt Stock Exchange continued to function as a "domestic stock exchange", it had, in reality, no major function. Nazi economic controls constricted the development of the free market and stock market trading. By and large, potential capital assets were only supposed to benefit the war economy and could no longer be invested in larger bonds or shares. The Frankfurt Stock Exchange building was badly damaged during an allied air raid in 1944. Stock exchange meetings could therefore only be held in the cellar rooms of the building.
Following the collapse of the Nazi regime in 1945, the exchange initially remained closed for six months. It was reopened in September 1945 as one of the first German stock exchanges.
It was only following the currency reform of 1948 and the growing consolidation of the German economy that the Frankfurt Stock Exchange gradually recovered its old significance. Beginning in 1956, the purchase of foreign securities was again permitted in Germany. Frankfurt was thus able to return to its tradition of international business and resume its leading position in Germany. The stock exchanges played an important role as capital intermediaries for the country's post-war reconstruction. Through their activity, they were also decisively involved in the subsequent "economic miracle" and the Federal Republic of Germany's achievement in becoming a major economic force in the world.
DAX® was introduced in 1988. Today, it is one of the world’s most well-known blue-chip indices. Deutsche Börse AG was founded in 1993. It has since been the operating body of FWB® Frankfurter Wertpapierbörse, entity under public law, or, as it is better known outside of Germany, the Frankfurt Stock Exchange.
Its success in recent years is not due to the change in the company structure alone. As early as 1969, Deutsche Börse began processing some of its data electronically. With the launch of Xetra® in 1997, the company heralded a completely new exchange era. Since then, floor trading has diminished in importance. With fully electronic Xetra trading, the exchange is now wherever there are screens. Xetra has been established as one of the leading trading systems in the world, a synonym for electronic and international securities trading.
In the course of the fundamental developments at the close of the twentieth century, the Group has evolved from a mere market-place organizer for share trading to an international service provider to the securities industry covering the entire process chain of exchange trading.
Deutsche Börse Systems AG builds and operates the trading systems and has been supporting Deutsche Börse’s global network of participants since 1997.
Eurex was established in 1998 with the merger of DTB Deutsche Terminbörse (the German derivatives exchange) and SOFFEX (Swiss Options and Financial Futures). As one of the world's largest derivatives exchanges and the leading clearing house in Europe, Eurex provides access to the benchmark futures and options market for European derivatives independent of where market participants are located. It offers a high-quality, cost-efficient and comprehensive trading and clearing value chain.
In 2000, Deutsche Börse Clearing AG and Cedel International merged to create Clearstream International. The one hundred percent subsidiary of Deutsche Börse is Europe’s leading supplier of integrated services for the post-trading infrastructure for shares and bonds in national and international trading and securities custody.