In a statement at the London School of Economics the President of the Association of German Banks, Rolf Breuer asked whether the British financial system is superior to the German system, and if Germany’s banks doomed to forever play second fiddle as well.
Frankfurt and London have become synonymous with the financial systems they represent. So if the title of today’s symposium suggests that London holds an unassailable lead in competition with Frankfurt, does this mean at the same time that the British financial system is superior to the German system?
The capital-market-based system cannot be regarded as generally superior. We can all see that both systems are moving towards each other as they constantly undergo transformation. Ultimately, a synthesis of the strengths of both systems is therefore by no means unlikely.
Abolishing the tripartite structure of the German banking sector is only one condition for ensuring a bright future for Germany’s banks. A whole number of other changes are needed as well. In addition, the legal framework for the financial market must be constantly improved and adapted to take account of international changes, particularly in the European Union.
The future of the German banking sector is by no means as gloomy as a glance at the current earnings figures might suggest. The single European financial market creates new opportunities for German as well as other banks in the EU. I am confident that Germany’s banks will manage to overcome the existing obstacles and regain their old strength. This means that Frankfurt will remain a serious rival for London in the future too.
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