The general election on 27 September 2009 marked a change in the composition of the German Government. After the Social Democratic Party (SPD) – who have so far been part of the governing coalition in Germany – lost a considerable share of votes, Chancellor Angela Merkel's Christian Democratic Party (CDU) is likely to enter into a coalition with the Free Democratic Party (FDP) instead.

Both the CDU and FDP have set out their suggestions for future bank regulation in their manifestos. At the first glance, their positions seem to be based on different assumptions:

However, when it comes to substantial ideas, both parties agree on basic points that are therefore likely to become part of the next Government's programme.

Both parties agree that bank supervision, be it on the national, EU or international level, needs to be concentrated in one institution per level. Both parties consider the European Central Bank the most appropriate institution for bank supervision in the EU. On the national level, the German Central Bank (Bundeszentralbank), as opposed to the Federal Financial Supervisory Authority (BaFin), will be solely responsible for bank supervision. Both parties have made their intention to improve the effectiveness of European and international bank supervision subject to international consent.

Both parties are also critical of the role played by rating agencies in the financial and banking crisis. Both demand a separation of the actual rating function from the advisory function often exercised by rating agencies where both parties see a conflict of interest. Both CDU and FDP also mention the possibility of setting up a European rating agency, with CDU furthermore favouring international supervision over rating agencies that should introduce rating standards and supervise their application.

Another point where both parties' manifestos agree is that securities should be more transparent to allow for a more informed assessment of their risk. Moreover, both parties are considering implementing an obligation on institutions that securitise loans to retain a certain share of the loans to stop the institutions from hiding and selling on risks while keeping the profits.

The manifesto of the FDP additionally addresses the issue of insolvency procedures and banks. In the aftershock of the Lehman insolvency, governments struggled to save banks rather than risking even more serious damage to the financial system by letting more banks go into insolvency. The FDP criticises this approach arguing that it fails to punish risky behaviour. Therefore, the FDP is pushing for ways to allow for insolvency proceedings while safeguarding the functioning of the market. The CDU manifesto does not address this issue. However, it has been widely discussed in the recent months and there is little doubt that both parties will attempt to come to a solution on this point as well.