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Banking relationships in Germany: empirical results and policy implications

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  • Robert S. Chirinko
  • Julie Ann Elston

Abstract

Expanding the range of activities by banks and other financial intermediaries has attracted much attention in the 1990s. Proponents of universal banking point to the benefits of German system of finance. Germany is the prototypical economy where universal banks, which offer a wide-range of financial services, allegedly exert substantial influence over firms and generate beneficial effects for the economy-wide allocation of credit. Arguments for replacing the specialized banking system currently in place in the United States with a universal banking system rely on a favorable evaluation of the German financial system. An empirical evaluation of banking relationships in Germany, however, has been hindered by a lack of data. This study reports an initial set of results based on a rich dataset containing balance sheet and income statement variables supplemented by measures of ownership concentration and bank influence.

Suggested Citation

  • Robert S. Chirinko & Julie Ann Elston, 1996. "Banking relationships in Germany: empirical results and policy implications," Research Working Paper 96-05, Federal Reserve Bank of Kansas City.
  • Handle: RePEc:fip:fedkrw:96-05
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    Cited by:

    1. Santos, Joao A.C. & Rumble, Adrienne S., 2006. "The American keiretsu and universal banks: Investing, voting and sitting on nonfinancials' corporate boards," Journal of Financial Economics, Elsevier, vol. 80(2), pages 419-454, May.
    2. Maria Teresa VALDERRAMA & Sylvia KAUFMANN, "undated". "Modeling Credit Aggregates," EcoMod2004 330600146, EcoMod.
    3. Börsch-Supan, Axel & Köke, Jens, 2000. "An applied econometricians' view of empirical corporate governance studies," ZEW Discussion Papers 00-17, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    4. Axel Börsch-Supan & Jens Köke, 2002. "An Applied Econometricians' View of Empirical Corporate Governance Studies," German Economic Review, Verein für Socialpolitik, vol. 3(3), pages 295-326, August.
    5. Sylvia Kaufmann & Maria Teresa Valderrama, 2008. "Bank lending in Germany and the UK: are there differences between a bank-based and a market-based country?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 13(3), pages 266-279.
    6. João A.C. Santos, 1998. "Banking and commerce: how does the United States compare to other countries?," Economic Review, Federal Reserve Bank of Cleveland, issue Q IV, pages 14-26.

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    Keywords

    Banks and banking - Germany ; Germany;

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