The German Banking System Essay Research Paper — страница 5

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negotiable promissory notes with private placement. This market accounts for more than two-thirds of Germany’s bond market, and with a minimum denomination of DM 1 million, are used mainly by institutions. The German Financial Futures and Options Exchange (DTB), started in 1990, offers fully computerized trading of futures and options. It has not been as influential as the other markets, as trading volume is significantly lower.Of the financial markets in Germany, the bond market is most significant source of financing. It has over eight times the new issuance volume than the stock market. This is not to say that equity markets are not important. The German stock market is the fourth largest equity market in the world. However, the function of equity has traditionally been more

a vehicle of control than raising finance. OVERVIEW Germany possesses a unique banking system that consists of universal banking, high autonomy of central banks, and strong financial markets. The Bundesbank has been able to effectively deal with monetary policy through its open market actions, similar to that of the United States. The challenges that the German banking system will face will be largely due to the European Union and effectively integrating it into their system. There is likely to be an increase in the mergers and acquisitions of the banking sector as the European Union will bring about more of a free movement of goods, services, and capital throughout Europe. The German banking sector will also find itself in a good competitive position internationally as they will

be able to offer full-service activities in an increasingly global and consolidated industry. 339