Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/3228 
Authors: 
Year of Publication: 
2004
Series/Report no.: 
Kiel Working Paper No. 1206
Publisher: 
Kiel Institute for World Economics (IfW), Kiel
Abstract: 
Germany'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.
Subjects: 
Banking system
capital market
corporate governance
JEL: 
G3
Document Type: 
Working Paper

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