_ Many firms are now choosing to issue bonds rather than take out bank loans. This means pure retail banks lose out, but those with wholesale arms boost profits by taking firms to the bond market (1)._
Right. Banks slowed the retail banking business to tiny drops. No worry. Playing with investment banking in the bond market is enough for the universal bank to be OK, at least for some time. Since the economy consists in main part of smaller size enterprises depending mostly on retail banking, too bad for the economy.
We should remember the wisdom of our ancestors from the Great Depression. They fixed the mess, separating retail and investment banking branches. Can we do better? Not so sure. Can we do the same? Definitely.
Kritiker50 wrote:
In Germany the Sparkassen (50 Million customers) and Raifeisenkassen (18 million customers) - sort of equivalent to Credit Unions (especially the Raiffeisenkassen)- follow the model of retail-banking.
They do not have investment banking. They serve the classical needs and give e.g. loans to private people for homes and to small and midsize companies in their region. They are partners of the German Mittelstand and of small enterprises. They help to create Jobs and to speed up innovation.
The main German JOB-MOTOR is the Mittelstand.
The main focus of Sparkassen and Raiffeisenkassen is:
- Private customers, small and midsize enterprises.
-They are locally organized but have strong Central Institutions.
-They are quite big (2011 for Sparkassen Finanzgruppe including banks, insurance companies, an Investment Fund company etc.): 3,250 Trillion business volume.
They improved their profit during the financial crisis and gained customers.
1.Banking reform. Sticking together. The Economist, August 17, 2012.
Komentarų nėra:
Rašyti komentarą