Introduction: Aspects of the Financial Crisis When the current financial and economic crisis began in mid-2007 – back then we were just talking about a“subprime crisis” – it was assumed that this was a problem with worthless U.S. mortgages that would remain restricted largely to the American market and in particular to this specific asset class. That was not the case. By autumn 2008 there was a real danger of the entire global financial system falling apart. What followed was a deep and above all synchronous collapse in global demand and production. Measures must be introduced to reduce the likelihood of similar crises recurring, and above all to do everything possible to exclude a systemic banking crisis. Action is needed on supervision and regulation. If systemic banking crises are to be contained, structural and regulatory consequences need to be drawn. Until now accepted wisdom has defined efficiency in the banking market as a situation where the few players left are as large as possible and reap the maximum possible return on equity. It is time to set that whole approach aside, for it has turned out to be anything but expedient for a healthy supply of business credit, nor has it produced results in terms of financial market stability. Fundamental observations 1. It was a mistake to assume that the financial markets are capable of even partial self­regulation. The process of widespread deregulation was in fact one of the underlying causes of the financial crisis. 2. It has become clear that a return on equity exceeding 20 percent cannot be maintained over time. Even in the short term such returns can be achieved only at the price of entering into great risks. 3. The process of strong disintermediation that took place in the traditional deposit-based banking sector in advance of the crisis turned out not to be viable. Rather than squeezing out financial intermediaries in favour of loan securitisation, what is needed is for the banks to return to their classical transformation functions. The banking sector must focus more strongly on the real economy, especially expanding the“principal bank” function and direct customer relationships. 1