The idea of public loan banking in its German form")?> The German concept of "Bausparen" (saving money to build a house) may be unknown to foreigners and should be explained in detail: Imagine ten persons that each wish to build own houses with comparable costs and that can't provide personal capital. If every single one of them saves a tenth of the required money per year, every single one will have enough money after 10 years. If all of them join together in a so-called collective the first one can build after the first year already taking the saving amounts of the other savers. In the second year the second one can build with the financial means of 8 savers and the first rate of the first one who is now paying off his credit. This way all of them can build their houses distributed over 10 years after waiting 4.5 years on average less than in the case of saving for his own.

Some figures")?> This self-help system that has become much more sophisticated than described above plays an important role in Germany concerning the public encouragement and suport of house building. At the moment there are 22 private and 13 public "Bausparkassen" (building and loan associations in the above sense) with approximately 32 million contracts and an overall saving amount of 1.2 trillion DM. The LBS, our cooperation partner, hold 30 percent of the whole market and as such they are market leaders.

Apects of investigation")?> A typical saving contract has three phases: the saving phase, the apportionment and the loan phase. All three phases can be analyzed independently from each other and in a second step correlations between the patterns of behavior in the three phases can be examined. The saving phase is the most interesting one because the saver can freely decide on his saving strategy - as opposed to the third phase in which the pay-off of the loan is regulated by the contract.

There are two main problem concerning the product control of such a collective of savers: the development of the collective in the past (collective analysis) and in the future (collective prognosis). Analyses serve the purpose of short-term planning of liquidity and as a basis of market strategies, whereas forecasts help in medium-term and long-term liquidity planning and product development.

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