Corporate governance in Germany: The changing role of the banks

The article analyses the different channels ‐ industrial stakes, supervisory board mandates, proxy voting ‐ by which German banks can exert influence on industrial companies. The central thesis is that even where the banks have such influence they do not dominate the companies. A recent empirical study on the effects of the alleged bank dominance over industrial companies with detrimental effects on their performance is shown to contain major methodological mistakes. The relationship between banks and industry is undergoing some distinct changes. Banks have substantially reduced their industrial stakes as well as their representation on supervisory boards, which underlines that they are not striving for industrial leadership. Despite a clear trend in the German corporate sector to pay increasing attention to shareholder value and to provide more transparency in accounting, it seems premature to expect the German capital market, including the corporate governance system, to incorporate fully the Anglo‐Saxon model in the immediate future.     

The one-third rule: Learning about the net economic benefit of a subsidy from a single observation

The subsidization of a natural monopoly is justified on welfare-economic grounds if the resulting total economic surplus exceeds total costs. Using rather standard assumptions, a simple check, managing with a minimum of information and, in particular, without virtually any knowledge of the demand curve, is developed which is capable of confirming an existing economic case for subsidization.     

Changing security cultures in Europe and Southeast Asia: Implications for inter-regionalism

Recent development in Southeast Asia demonstrates a slowly but steadily changing security culture from, first, an informal, consensus-based and often hidden way of managing security to a more open and explicit discourse and, second, from a statist realist definition of security as hard or military security to a broader, liberal understanding that covers the whole spectrum of human, economic and environmental security. This security culture in the making also touches upon formerly tabooed issues such as sovereignty and humanitarian intervention. The paper argues that the new approach has removed obstacles in relations between Europe and East Asia and contributed to the emergence of security as a cornerstone of the co-operation agenda since 1998. At the same time, however, a rapid translation of the inter-regional discourse on security into a working programme or even specific policies is hindered by the prevalence of diverging views on the nature, scope and degree of institutionalisation in Europe-East Asia relations.