Günter Lang
The Impact of SMP and EMU on German Banking
Abstract:
This study assesses the impact of the single market program (SMP) and the
European monetary union (EMU) on the German banking sector. As a main result,
the introduction of the EMU can be assessed as more important for the German
banking system than the SMP because of the relative liberal conditions
prior to the SMP. To maintain or enhance profitability in an environment
of decreasing margins, all banks will increase their efforts to reduce
costs. On the product side, the disintermediation process is expected to
speed up. As a consequence, the traditional system of universal banks could
be somewhat changed: A partial retreat of savings as well as cooperative
banks from investment banking, accompanied by increasing market shares
in the branch-based retail business. For commercial banks, the consultation-intense
investment business is very attractive. On the retail sector, a specialization
on direct banking allows for additional customers from abroad as well as
for high growth rates in the brokerage business.
JEL: G21, L1
Paper:
Paper available as pdf-file.
Beitrag Nr. 192, Volkswirtschaftliche Diskussionsreihe, Institut für
Volkswirtschaftslehre der Universität Augsburg
Contact:
Günter
Lang, University of Augsburg, Department of Economics, D-86135 Augsburg,
Germany, phone +49-821-598-4195, fax +49-821-598-4230,
email:
Guenter.Lang@wiwi.uni-augsburg.de
v.
K., 15.02.2000