Banking market reform

In Germany, discussions have been going on for years about the structure of the German banking market. Most experts, including those in the political arena, agree that there is a need for reform - especially in view of the fact that profound structural changes have already taken place in other European countries. A look at the experience of reform in these countries can shed light on the future development of the German banking system.



Structural change in the Italian banking system: dynamic development thanks to privatisation

The Italian banking system has undergone profound transformation during the past ten years. Following deregulation and the state’s partial withdrawal from banking business, groups of banks with strong earnings power have emerged from the previously separate sectors of the Italian banking industry. Larger units and keener competition have led to a wider range of banking products geared to customers’ needs and a growing number of branches.
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Consolidation of the Swedish banking system

Sweden shifted about 125 years ago from an agricultural to a modern industrial society, leading to industrial as well as banking consolidation. Crises in the 1920s and 30s as well as in the 90s played an important role in the significant changes within the banking industry. Of the thousand banks Sweden had 80 years ago, four major banks and ninety small savings banks now remain. Around thirty smaller banks have recently entered as new players, putting pressure on the old banking system.
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The UK banking market: consolidation, competition and the Cruickshank Report

The British Treasury asked a commission led by Don Cruickshank to examine levels of innovation, competition and efficiency in the UK banking industry, to look at how these levels compare with international standards and to consider options for change. An interesting point, with the banking debate in Germany in mind, is that the Cruickshank Report contains nothing to back up the argument that a system of private banks would, on its own, not be able to ensure efficient competition.
Complete article (PDF - 513k)