Should banks own industrial firms? : Remarks from the German perspective

  • Other than in Belgium, German banks may hold even controlling equity participations in industrial firms (and such firms may own banks) and do so to a large extent. Vis-a-vis the European development this leads to two questions: From the perspective of the (Belgian and other) competitors of these banks, whether their own domestic System might be disadvantageous to them. And from a public interest perspective, which advantages and drawbacks are connected with the different regulations in Europe. The article first informs about the legal framework and some statistical facts. Then the various and different reasons why banks acquire and hold shares on own account are analyzed. The following Parts deal with the various public policy arguments whether equity links between banks and industrial firms should be prohibited or not (safety and soundness of banking; autonomie de Ia fonction bancaire ; abuse of confidential information and conflicts of interest; antitrust considerations; negative and positive impacts on the respective firm). In its last part the article deals with recent proposals in the German political debate to limit stockholdings of banks. The article argues that a step-by-step approach to the Single Problems and issues (conflict of interests; anticompetitive effects etc.) should be preferred to a general limitation of stock ownership of banks.

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Author:Theodor BaumsGND
Parent Title (English):Institut für Handels- und Wirtschaftsrecht (Osnabrück): Arbeitspapiere ; [19]92,3
Parent Title (German):Institut für Bankrecht (Frankfurt, Main): Arbeitspapiere ; Nr. 3
Series (Serial Number):Arbeitspapiere / Johann-Wolfgang-Goethe-Universität, Institut für Bankrecht (3)
Publisher:Institut für Handels- und Wirtschaftsrecht
Place of publication:Osnabrück
Document Type:Working Paper
Year of Completion:1992
Year of first Publication:1992
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2005/04/11
Page Number:20
Source:Arbeitspapiere // Universität Osnabrück, Institut für Handels- und Wirtschaftsrecht ; 92,3
Institutes:Rechtswissenschaft / Rechtswissenschaft
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
3 Sozialwissenschaften / 34 Recht / 340 Recht
Licence (German):License LogoDeutsches Urheberrecht