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Foreign competition and disintermediation: no threat to the German banking system?

Author

Listed:
  • Claudia M. Buch

    (Institut fur Weltwirtschaft, Kiel (Germany))

  • Stefan M. Golder

    (Institut fur Weltwirtschaft, Kiel (Germany))

Abstract

The German financial system is characterized by low degrees of penetration by foreign commercial banks and of (bank) disintermediation compared to, for instance, the United States. This could be attributed to the fact that universal banking in Germany creates implicit barriers to entry. Yet, regulatory and informational differences which are unrelated to universal banking could be responsible for the observed difference. This paper provides a stylized theoretical model of the banking industry, which suggests that market segmentation and limited market entry can be due to a number of factors, including information costs. Preliminary empirical evidence does not provide clear evidence for the hypothesis that universal banking is the reason for the observed differences in financial systems.

Suggested Citation

  • Claudia M. Buch & Stefan M. Golder, 2000. "Foreign competition and disintermediation: no threat to the German banking system?," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 53(213), pages 107-133.
    • Handle: RePEc:psl:bnlaqr:2000:21
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    Cited by:

    1. Pietro Alessandrini & Luca Papi & Alberto Zazzaro, 2003. "Banche, territorio e sviluppo," Moneta e Credito, Economia civile, vol. 56(221), pages 3-43.
    2. Buch, Claudia M. & Golder, Stefan M., 2000. "Domestic and Foreign Banks in Germany: Do They Differ?," Kiel Working Papers 986, Kiel Institute for the World Economy (IfW Kiel).
    3. Pietro Alessandrini & Luca Papi & Alberto Zazzaro, 2003. "Banks, regions and development," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 56(224), pages 23-55.
    4. Buch, Claudia M. & Golder, Stefan M., 2001. "Foreign versus domestic banks in Germany and the US: a tale of two markets?," Journal of Multinational Financial Management, Elsevier, vol. 11(4-5), pages 341-361, December.

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    More about this item

    Keywords

    Germany; banking system;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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