Banks, Finance and Investment in Germany

If we are moving toward one global financial market, will all national financial systems that determine how businesses raise money look the same? Richard Deeg argues that, despite financial market integration and considerable harmonization in the regulation of financial markets, the traditional structure and economic functions of national financial systems are not inevitably undermined. Using the case of Germany--a country with a strong and distinctive financial sector that is at the center of the pressures of economic integration--the author shows how the unique aspects of the German financial sector and its relationship to the German economy have persisted notwithstanding powerful pressures to change. Posing the German model of coordinated capitalism in which banks play an important role in shaping both firm behavior and the possibilities for state intervention in the economy against the liberal model of the United States and Britain in which the securities markets play a much greater role than banks, Deeg shows how the German model has survived competitive pressures in the international economic system that have pushed Germany--and other countries--toward the liberal model.

Each type of financial system offers its own strengths and weaknesses. The German system is noted for fostering a long-term outlook and steady relationships between borrowers and lenders in an environment of financial and macroeconomic stability. The Anglo-American system is thought of as providing a more favourable environment for startup firms to obtain market financing, as well as more attractive returns to investors and a more dynamic market for corporate control. On the other hand, the Anglo-American system is faulted for its short-term outlook and lack of attention to other than shareholder concerns, while the German system has been criticized as lacking in innovation and attention to shareholders.

The overall conclusions of this volume are: (1) each type of financial system has strengths and weaknesses, and each can learn from the other in mending its own faults; (2) the globalization of financial markets, the inadequacy of existing pension arrangements, and the monetary unification of Europe are all driving each system towards a middle ground which adopts the advantages of the universal bank and the strengths of the open financial market.

Corporate-finance benefits from universal banking: Germany and the United States, 1870-1914 (NBER working paper series)

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Corporate-finance benefits from universal banking: Germany and the United States, 1870-1914 (NBER working paper series)
Charles W Calomiris
Manufacturer: National Bureau of Economic Research
ProductGroup: Book
Binding: Unknown Binding

Germany: Business Guide to the Banks, Financial & Insurance Companies

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Germany: Business Guide to the Banks, Financial & Insurance Companies
Business Information Agency
Manufacturer: Business Information Agency
ProductGroup: Book
Binding: Paperback
ASIN: 1418718696

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