Finanzplatz deutschland: National or European response to internationalisation?

Germany's has long been held up as a competitive, bank‐based financial system, providing long‐term and secure finance for industrial and service companies. The emphasis here is on the international market and regulatory conditions which have helped to transform the the financial system. In the 1980s, the government remained averse to any ‘Big Bang’ experiment, adapting national securities markets to policy initiatives in the US, and in London and Paris. This aversion was rooted in Bundesbank opposition to the development of money markets, and to the practice of corporate‐bank‐insurance cross‐shareholding among Germany's big publicly listed corporations. The politics of ‘Finanzplatz Deutschland’ achieved a balance between maintaining national institutions and adapting them carefully to international markets and regulation. Implementing monetary union and the European financial area in the 1990s and beyond amounts in effect to a ‘Big Bang ‘ policy which is already under way. The prospect of a liquid ‘Euro'‐market for securities, and increasingly competitive banking and insurance markets, spells a shift in German corporate policies towards Anglo‐American practices. National cross‐shareholding corporate structures will not long survive a single currency.