Arbeitspapier

Do we need a separate banking system? An assessment

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.

Language
Englisch

Bibliographic citation
Series: ZEW Discussion Papers ; No. 13-011

Classification
Wirtschaft
Financial Crises
General Financial Markets: Government Policy and Regulation
Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
Subject
Banking Regulation
Commercial and Investment Banking
Financial Crises

Event
Geistige Schöpfung
(who)
Lang, Gunnar
Schröder, Michael
Event
Veröffentlichung
(who)
Zentrum für Europäische Wirtschaftsforschung (ZEW)
(where)
Mannheim
(when)
2013

Handle
URN
urn:nbn:de:bsz:180-madoc-331742
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Lang, Gunnar
  • Schröder, Michael
  • Zentrum für Europäische Wirtschaftsforschung (ZEW)

Time of origin

  • 2013

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