20041005 Adam Posen

33 %
67 %
Information about 20041005 Adam Posen
Entertainment

Published on October 9, 2007

Author: Abhil

Source: authorstream.com

It Never Really Worked: Universal Banking in Germany and Japan:  It Never Really Worked: Universal Banking in Germany and Japan Adam S. Posen Institute for International Economics Nomura-Brookings Seminar on Financial Services in the Aftermath of GLB October 5, 2004 Remember the Model?:  Remember the Model? Fifteen years ago, ‘patient capital’ with ‘long-time horizons’ was supposed to be a source of competitive advantage in Germany and Japan High savings rate with conservative households ‘Mixed Claims’ (equity and debt) improving corporate governance Interlocking boards going beyond this quarter’s liquidity problem for investment Universal banking creating diversification and competition Supervision centralized and streamlined ….At least that was the theory Connections, Connections, :  Connections, Connections, Instead, universal banking in Germany and Japan proved to be anti-competitive Bank consolidation was abysmally slow in Japan, and has not happened yet in Germany Only partly a question of public banks/Postal Savings Mixed claims led to mutually entrenched management of banks and non-financial firms Value destroying from the start (e.g., Weinstein and Yafeh (1995; 1998); Hoshi and Kashyap (2001)) Over-lending to uncompetitive small- and medium-enterprises/the Mittelstand seems to be inherent The best firms go to capital markets, the worst firms get loans rolled over (e.g., Posen (2003); Shimizu (2000)) Insurance companies are treated as money pots Was connected lending inevitable for universal banking?:  Was connected lending inevitable for universal banking? The starting points were very different from each other and from the US in 1999 Long German tradition of universal banking Japan starts postwar with US-style separations Neither country had well-developed securities markets or risk-tolerance among investors Still, the gains for financial managers from pursuing the protected course far outweigh those from arms-length transactions The issue is probably shrinking/replacing the banking system rather than allowing it to diversify (Posen (2001), unless the goal is to keep the banks afloat An Ugly Record on Supervision:  An Ugly Record on Supervision A great deal of faith is put into supervision, but it cannot escape its political imperatives German Buba shadows supervisors, but will not be held accountable, and got trumped in 2003 Japanese FSA retains revolving door Despite lack of regulatory competition, local bank-politician relationships are powerful Desires for national champions have so far defeated any efforts at true internationalization If judgment is involved, the incentives for forebearance are overwhelming; if rules are involved,why any better than the market? Premium on diminished transparency Hidden reserves aren’t just for Fannie and Freddie Macroeconomic Implications are Procyclical not Stabilizing:  Macroeconomic Implications are Procyclical not Stabilizing There is some cross-national evidence on average growth rates that says financial/banking system does not matter either way Caprio, et al; Levine, et al; OECD (Leahy, et al) Time-series evidence on cyclical persistence and on volatility is more negative about performance Financial accelerator effect deepens with shareholdings Regulatory forebearance increases with central bank regulator and cyclical bank capital (Posen (1993)) Shock absorbtion impedes reallocation across sectors (Kuttner and Posen (2001), Caballero, Hoshi, and Kashyap (2003), Posen (2003)) and may amplify transmission of equity market shocks No evidence of greater macro stability payoff for universal banking), and some indications of deeper crises when they hit (Posen (2001))

Add a comment

Related presentations

Related pages

It Never Really Worked: Universal Banking in Germany and Japan

It Never Really Worked: Universal Banking in Germany and Japan Adam S. Posen Institute for International Economics. Nomura-Brookings Seminar on Financial
Read more

THE BROOKINGS INSTITUTION - Nomura Foundation

Adam Posen Institute for International Economics Robin Prager Federal Reserve Board Jeanne Roslanowick Committee on Financial Services U. S. House of ...
Read more

SNAP Connecticut - News 20041005a

By ADAM WITTENBERG Special to The ... the archbishop of Hartford may choose to forward information indicating the threat he may pose to children or young ...
Read more

Patent US20050102536 - Dynamically configurable ...

... the administration console allows a user to pose “what if” policy ... Robert Adams: Control of access control ... FROM 20041004 TO 20041005 ...
Read more

Patent US20050185060 - Image base inquiry system for ...

An increasing number of mobile telephones and computers are being equipped with a camera. Thus, instead of simple text strings, it is also possible to send ...
Read more

Dow AgroSciences UK Ltd

Dow AgroSciences Ltd provides UK growers with both well-established and innovative crop protection products.
Read more

4_04s - Scribd - Read Unlimited Books

... geb. 1893 Samotschin/Posen, gest. 1939 Kurt Eisner, geb. 1867, ermordet 1921 Franz Werfel, geb. 1890 in Prag, gest. 1945 Arnold Zweig, 1887-1968 ...
Read more

Patent US20050185060 - Image base inquiry system for ...

An increasing number of mobile telephones and computers are being equipped with a camera. Thus, instead of simple text strings, it is also possible to send ...
Read more

Gangs and Crime in Latin America

ADAM SMITH, Washington BETTY McCOLLUM, Minnesota ... In conclusion, rising crime and gang violence in Latin America pose a direct threat to security, ...
Read more

419 Scam – How do the scammers get money?

How do the 419 scammers get money? About the 419 ... The 419 scam recipient is to pose as the contractor to receive payment from ... , MR SMITHS ADAMS.
Read more