The German Financial System

by Krahnen, Jan Pieter; Schmidt, Reinhard H.

• ISBN13: 9780199253166
• ISBN10: 0199253161
• Format: Hardcover
• Copyright: 2004-06-03
• Publisher: Oxford University Press

Summary

This is a much needed volume on the German financial system providing both a descriptive survey of the present state of the system and a new analytical framework to explain its workings. This book is written by a team of scholars, predominantly from the Centre for Financial Studies in Frankfurt.

Table of Contents

List of Figures	xiii
List of Tables	xv
Notes on Contributors	xvii
Part I Introduction and Overview	1	(68)
The Purpose and Structure of the Book	3	(16)
Jan Pieter Krahnen
Reinhard H. Schmidt
Motivation	3	(2)
Questions to be Asked: What Can We Learn from the Modern Literature on Financial Development?	5	(3)
Myths, Methods, and Major Insights	8	(8)
Who Should Read this Book?	16	(3)
What Constitutes a Financial System in General and the German Financial System in Particular?	19	(50)
Reinhard H. Schmidt
Marcel Tyrell
The Purpose and Structure of this Chapter	19	(1)
The Meaning of the Term 'Financial System' and the Importance of Financial Systems	20	(3)
Different Approaches to Analysing Financial Systems	23	(7)
The German Financial System: an Overview of its Characteristic Features	30	(27)
A Brief International Comparison and a Short Outlook	57	(12)
Part II Financial Sectors and Corporate Finance	69	(220)
German Banks and Banking Structure	71	(35)
Andreas Hackethal
Introduction---Bank Disintermediation in Germany?	71	(2)
The Structure of the Banking Market	73	(14)
Major Trends in the German Banking Market	87	(3)
Reports of the Death of Commercial Banking Might be Exaggerated	90	(9)
Outlook	99	(1)
Conclusion	100	(6)
Institutional Investors in Germany: Insurance Companies and Investment Funds	106	(33)
Raimond Maurer
Introduction	106	(2)
Insurance Companies	108	(15)
Investment Funds	123	(16)
Organized Equity Markets	139	(24)
Erik Theissen
Introduction	139	(1)
The German Equity Market	139	(4)
The (Micro)Structure of the German Equity Market	143	(16)
Conclusion	159	(4)
Monetary Policy Transmission and the Financial System in Germany	163	(34)
Andreas Worms
Introduction	163	(1)
The Effects of Monetary Policy on Output and Inflation in Germany	164	(3)
The Channels of Monetary Policy Transmission	167	(9)
Is There a Credit Channel in Germany?	176	(14)
Summary and Conclusions	190	(7)
Universal Banks and Relationships with Firms	197	(36)
Ralf Elsas
Jan Pieter Krahnen
Myth and Motivation	197	(1)
Universal Banks as Financiers of Large Companies: Equity Stakes and Proxy Voting	198	(9)
Banks as Financiers of Small and Medium Enterprises: Lending Relationships	207	(6)
Banks as Financiers of Small and Medium Enterprises: Intertemporal Smoothing, Liquidity Insurance, and Credit Availability	213	(6)
Banks as Financiers of Small and Medium Enterprises: Borrower Distress, Reorganization, and Liquidation	219	(7)
The Hausbank: Myth, Reality, and the Future	226	(7)
Initial Public Offerings and Venture Capital in Germany	233	(28)
Stefanie Franzke
Stefanie Grohs
Christian Laux
Introduction	233	(1)
Initial Public Offerings	234	(5)
Venture Capital Financing in Germany	239	(7)
Why are there so Few IPOs and so Little VC in Germany?	246	(9)
Conclusion	255	(6)
Mergers and Acquisitions in Germany: Social Setting and Regulatory Framework	261	(28)
Frank A. Schmid
Mark Wahrenburg
Introduction	261	(2)
The Social Setting	263	(6)
The Regulatory Framework	269	(6)
Takeover Barriers	275	(9)
Conclusion	284	(5)
Part III Regulation and Corporate Governance	289	(194)
Regulation and Competition in German Banking: An Assessment	291	(59)
Karl-Hermann Fischer
Christian Pfeil
German Banking---Stability and Market Power	291	(28)
A Closer Look---Selected Issues in German Bank Regulation	319	(21)
Conclusion	340	(10)
Corporate Governance: Legal Aspects	350	(36)
Oliver Rieckers
Gerald Spindler
Introduction	350	(3)
Principles and Peculiarities of German Corporate Governance	353	(3)
The Structure of the German Stock Corporation	356	(12)
The Law of Corporate Groups	368	(6)
Current Issues	374	(11)
Conclusion	385	(1)
Corporate Governance in Germany: An Economic Perspective	386	(39)
Reinhard H. Schmidt
The Problem	386	(2)
Basic Concepts	388	(2)
German Corporate Governance from a Systemic Perspective	390	(14)
Developments in German Corporate Governance	404	(14)
Concluding Remarks	418	(7)
Investor Protection and Capital Market Regulation in Germany	425	(25)
Eric Nowak
Introduction	425	(1)
Changes in the Structure of Share Ownership and Growth of the German Stock Market	426	(2)
A Chronology of Formal Legal Changes in the German Capital Market	428	(13)
The Emergence of a Market for Corporate Control	441	(3)
Summary and Outlook	444	(6)
The Role of Accounting in the German Financial System	450	(33)
Christian Leuz
Jens Wustemann
Introduction: Accounting Myths	450	(1)
Financial Accounting and the Institutional Framework	451	(5)
Institutional Analysis	456	(12)
Empirical Evidence	468	(6)
Conclusion	474	(9)
Appendix	485
Part IV Perspectives	483	(34)
Taking Stock and Looking Ahead: The German Financial System at the Crossroads?	485	(32)
Jan Pieter Krahnen
Reinhard H. Schmidt
What We Want to Achieve in this Chapter	485	(2)
Recent Developments and the Current State of the German Financial System: Continuity and Change	487	(10)
Looking Ahead: a Debate Between Three Positions	497	(20)
List of Websites	517	(4)
Index	521