Banking regulation , commercial and investment banking , financial crises
Abstract:
Motivated by the current discussion on different separate banking systems, we provide
an overview of the different systems, question them and outline their effect on systemic
stability and the German banking sector. The results show that the various separate banking
systems only play a minor role in reducing and limiting systemic risk. They only marginally
contribute to solving conflicts of interest and can even be detrimental to banking business
diversification. A separate banking system could, however, facilitate banking supervision by
reducing the banking system’s complexity. Furthermore, credible threats to not support investment
banks with federal resources in times of crisis could lead to a more adequate incentives
structure of suppliers of equity and outside capital. More efficient measures to further
reduce systemic risk in the financial sector should, however, use different levers, such as additional
minimum regulatory capital requirements.
Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.
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