Germany's Capital Market and Corporate Governance
AbstractGermany’s capital market relies on bank-intermediated products and not so much on capital market processes. Two of the pillars in Germany’s three-pillar banking system, the savings banks and the cooperative banks, have special statutes and are not exposed to the control of the capital market through the usual threat of a change in ownership. Savings banks enjoy public guarantees. In the financing of firms, bank credits are far more important relative to market products - equity and bonds - than in the Anglo-Saxon countries. Moreover, banks so far have had a dominating position in corporate control through their holdings and their votes in the supervisory board in Germany’s two-tier system of corporate governance. In this system block holdings are a relevant element. With the banks themselves under the pressure of changed international conditions, the German system of corporate control has yet to prove its viability.
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1206.
Length: 46 pages
Date of creation: Apr 2004
Date of revision:
Banking system; capital market; corporate governance;
Find related papers by JEL classification:
- G3 - Financial Economics - - Corporate Finance and Governance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-06-02 (All new papers)
- NEP-CFN-2004-06-02 (Corporate Finance)
- NEP-EEC-2004-06-02 (European Economics)
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