Volume 15, Issue 1

This article examines how the introduction of a specialised banking system is likely to impact banks and the real economy in Germany, in particular from a financial stability perspective. This study is motivated by a recently passed law in Germany on a specialised banking system ( Trennbankengesetz ), current reforms in the US and UK and proposals for the EU. We focus on the consequences of a separation of the savings & loan business and proprietary trading. We conclude that proprietary trading plays a significant role only for large, systemically important banks in Germany. The latter act as universal banks and grant a considerable fraction of all loans that go to domestic enterprises and consumers. Costs for customers, however, are likely to be moderate. In contrast, a specialised banking system may provide the important advantage that insolvent trading units can be separated more easily from the savings & loan business arm and eventually liquidated. In this way, implicit state guarantees may be reduced.

This study describes the results of a survey conducted in all sixteen German state parliaments on federal preferences and expectations of the members of state parliaments. With respect to the constitutional debt brake the results indicate that many states are not expected to respect the zero deficit rule which holds from the year 2020 onwards. A remarkable asymmetry emerges between the self-assessment of a state and the assessment from outside. Today’s equalization intensity is regarded as generous but has a strong backing in the state parliaments. Views on larger tax autonomy are controversial. Heterogeneity of answers is visibly related to the financial capacity of states while party membership is rather correlated with tax autonomy than with debt brake preferences. Overall, the survey results indicate that, in spite of the debt brake, not all members of state parliaments are fully convinced of a hard budget constraint for the states. Moreover, this survey evidence points to a strong inertia of the federal status quo with respect to equalization and revenue competencies.

Zusammenfassung Wir entwickeln einen Reformvorschlag, der den problematischen Selektions­wettbewerb zwischen GKV und PKV beendet und zu einem fairen Systemwettbewerb führt. Jeder Bürger leistet einen einkommensabhängigen Beitrag zum Gesundheitsfonds und hat bei einem Wechsel in die PKV Anspruch auf risikogerechte Zahlungen aus dem Gesundheitsfonds. Die Versicherungspflichtgrenze wird gesenkt und langfristig abgeschafft. Private Versicherungen können nicht mehr allein deshalb mit Versicherten rechnen, weil diese durch einen Wechsel Solidarbeiträge vermeiden können. Die Nachhaltigkeit unseres Reformvorschlags wird durch eine Kapitalbildung gesichert. JEL-Klassifikation: I13, I18

In Germany, grand coalitions were in power over the periods 1966–1969 and 2005–2009. We employ descriptive time series analyses of macroeconomic variables. The results do not show that grand coalitions pursued significantly different economic policies than leftwing and rightwing governments. Qualitative analyses show, however, that the first grand coalition over the period 1966–1969 increased the size and scope of government. In December 2013, a new grand coalition came into power. The conservative CDU/CSU replaced its former market-oriented coalition partner FDP with the social democratic SPD. This new coalition is also expected to increase the size and scope of government.