The term Realkreditinstitut is a comprehensive term for public and private mortgage banks. It acts thereby around special banks for the financing of long-term investments of the public hand as well as of enterprises and private customers.
Mortgage banks give long-term loans, which by mortgage liens, as land charge and mortgage are secured. Besides they operate the local loan business with federation, countries and municipalities.
The financing funds constituted material banks as it mortgage certificates and public mortgage bonds spend themselves, thus to firm interest rates in principle a just as long-term raising of funds faces the long-term granting of credit.
To private ones and public mortgage banks special in each case legal regulations apply. Afterwards them apart from the assignment of hypotheken and local loans only a firmly outlined catalog is permitted by business. The special bank principle is to limit the risk lying in the granting of credit and other banking transactions. The privilege faces that to go mortgage bonds.
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