TY  - UNPD
A1  - Elsas, Ralf
A1  - Krahnen, Jan Pieter
T1  - Universal banks and relationships with firms : [Version Mai 2003]
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2003,20
N2  - Some of the most widely expressed myths about the German financial system are concerned with the close ties and intensive interaction between banks and firms, often described as Hausbank relationships. Links between banks and firms include direct shareholdings, board representation, and proxy voting and are particularly significant for corporate governance. Allegedly, these relationships promote investment and improve the performance of firms. Furthermore, German universal banks are believed to play a special role as large and informed monitoring investors (shareholders). However, for the very same reasons, German universal banks are frequently accused of abusing their influence on firms by exploiting rents and sustaining the entrenchment of firms against efficient transfers of firm control. In this paper, we review recent empirical evidence regarding the special role of banks for the corporate governance of German firms. We differentiate between large exchangelisted firms and small and medium sized companies throughout. With respect to the role of banks as monitoring investors, the evidence does not unanimously support a special role of banks for large firms. Only one study finds that banks´ control of management goes beyond what nonbank shareholders achieve. Proxyvoting rights apparently do not provide a significant means for banks to exert management control. Most of the recent evidence regarding small firms suggests that a Hausbank relationship can indeed be beneficial. Hausbanks are more willing to sustain financing when borrower quality deteriorates, and they invest more often than arm´s length banks in workouts if borrowers face financial distress.
T3  - CFS working paper series - 2003, 20 
KW  - relationship lending
KW  - Hausbank
KW  - universal banking
KW  - corporate finance
KW  - corporate governance
KW  - Deutschland
KW  - Universalbank
KW  - Betrieb
KW  - Firma
KW  - Gewerbebetrieb
KW  - Unternehmen
KW  - Lieferant
KW  - Corporate Governance
KW  - Finanzierung
KW  - Unternehmensentwicklung
Y1  - 2003
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/4464
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-10254
N1  - Revised version forthcoming in "The German Financial System", edited by Jan P. Krahnen and Reinhard H. Schmidt, Oxford University Press. September 2003.
IS  - Version Mai 2003
ER  -