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- E-Finance Lab e.V. (2) (remove)
THE CURRENT FINANCIAL CRISIS CALLS FOR A THOROUGH ANALYSIS OF BANKING SYSTEM STABILITY. WE ANALYZE GERMAN BANKS FROM A LIQUIDITY PERSPECTIVE TO ANSWER HOW FRAGILE THE GERMAN BANKING SYSTEM IS AND HOW WELL IT CAN COPE WITH SUDDEN ILLIQUIDITY SHOCKS. RESULTS SHOW THAT ALTHOUGH BANKS CREATE LIQUIDITY FOR THE GERMAN ECONOMY AND THEREBY EXPOSE THEMSELVES TO ILLIQUIDITY RISK, THE AGGREGATE BALANCE SHEET STRUCTURES ARE SAFE AND STABLE.
WE STUDY WHETHER PRIVATE EQUITY (PE) FIRMS HAVE A POSITIVE IMPACT ON THE FINANCIAL PERFORMANCE OF THEIR GERMAN PORTFOLIO COMPANIES BEFORE AND AFTER THE IPO. OUR EMPIRICAL ANALYSIS IS BASED ON A UNIQUE AND LARGE DATASET OF ALL IPOS IN GERMANY BETWEEN 2000 AND 2007. WE FIND THAT PE FIRMS SELECT COMPANIES WITH BELOW AVERAGE PERFORMANCE AND THEN IMPROVE PERFORMANCE SUBSTANTIALLY UNTIL THE IPO DATE AND IN MANY CASES ALSO THEREAFTER. THIS IMPLIES THAT PE FIRMS FILL A VOID ALSO IN GERMAN FINANCIAL MARKETS AND THAT THEY WILL ALSO PLAY A FUTURE ROLE IN FINANCING GERMAN ENTERPRISES.