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

Claudia Buch and Stefan M. Golder
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Stefan M. Golder: Institut fur Weltwirtschaft, Kiel (Germany)

Banca Nazionale del Lavoro Quarterly Review, 2000, vol. 53, issue 213, 107-133

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.

Keywords: Germany; banking system (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (5)

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