The German stock market experienced a significant decline during the period from 1933 to 1945, primarily due to the economic policies and interventions of the Nazi regime.
Here are key points about the German stock market’s performance 1933 to 1945:
- After the Nazis came to power in 1933, the German economy initially recovered, but the stock market did not benefit much from this growth.
- The Nazi government implemented various economic controls and interventionist policies that were detrimental to the development of free markets and equity trading.
- IPO activity on the Berlin Stock Exchange was effectively choked off starting in the early 1930s due to regulatory changes by the Nazi regime that were hostile to publicly listed companies.
- By 1938, Germany’s stock market capitalization as a percentage of GDP had fallen to just 0.18, down sharply from 0.44 in 1913, reflecting the damage done to equity markets under Nazi rule.
- The German government imposed a price freeze on stocks in January 1943 to prevent further declines, essentially freezing trading activity as no one wanted to buy stocks above their real value.
- Stock prices remained frozen at this depressed level until after WWII ended, despite rampant inflation and the destruction of the German economy during the war years.
In summary, the Nazi government’s economic policies and interventions severely undermined the development of German equity markets from 1933 onwards, reversing the country’s previous progress in building a well-functioning stock market.
