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Schackmann-Fallis, K., Gischer, H., Weiß, M. A Case for Boring Banking and Re-Intermediation. Applied Economics Quarterly, 64(3), 199-238.
Schackmann-Fallis, Karl-Peter; Gischer, Horst and Weiß, Mirko "A Case for Boring Banking and Re-Intermediation" Applied Economics Quarterly 64.3, , 199-238.
Schackmann-Fallis, Karl-Peter/Gischer, Horst/Weiß, Mirko: A Case for Boring Banking and Re-Intermediation, in: Applied Economics Quarterly, vol. 64, iss. 3, 199-238, [online]


A Case for Boring Banking and Re-Intermediation

Schackmann-Fallis, Karl-Peter | Gischer, Horst | Weiß, Mirko

Applied Economics Quarterly, Vol. 64 (2018), Iss. 3 : pp. 199–238

3 Citations (CrossRef)

Additional Information

Article Details


Author Details

Schackmann-Fallis, Karl-Peter, German Savings Banks Association (Deutscher Sparkassen- und Giroverband [DSGV]), Berlin (Germany), Executive Member of the Board of the German Savings Banks Association.

Gischer, Horst, Professor of Monetary Economics and Public Financial Institutions at Otto-von-Guericke-University Magdeburg (Germany).

Weiß, Mirko, German Savings Banks Association (Deutscher Sparkassen- und Giroverband [DSGV]), Berlin (Germany).

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Experience from the recent financial crisis quite clearly revealed the limits of deregulation. Instead of trusting in perfect financial markets, re-intermediation or “boring banking” seems to be a more promising alternative. In our discussion of the steps towards a European Banking Union that have been implemented so far, we seek to expose its shortcomings. Against this backdrop, we discuss whether boring banking is an economically and socio-politically appropriate goal at all. Outlining the economical functions of banks, we investigate whether a widely disintermediated financial system can work without frictions. Additionally, we evaluate the concepts of bank-based and capital-market-based financial systems from the perspective small and medium-sized enterprises. By way of example, the structure of the German banking industry as well as different business models are analyzed in the light of boring banking. We conclude with economic policy recommendations deemed necessary to promote – or at least preserve – traditional loan-making by banks.

JEL classifications: G18; G21; L52

Keywords: banking industry, financial intermediation, business models, European Banking Union

Table of Contents

Section Title Page Action Price
Karl-Peter Schackmann-Fallis / Horst Gischer / Mirko Weiß: A Case for Boring Banking and Re-Intermediation 199
Abstract 199
1. Introduction: Will the Change to Re-intermediation and “Boring Banking” be Successful? 199
2. Economic Functions of Banks and the Sustainability of Disintermediation 204
2.1 Reduction of Asymmetric Information and Moral Hazard 204
2.2 Risks Inherent in the Banking Business, and how They are Supposedly Overcome by Disintermediation 205
2.3 After the Crisis: Is Waiving the Banks’ Traditional Functions an Option? 207
3. Lending to Small and Medium-Sized Enterprises 199
3.1 Bank Financing vs. Capital Market Financing for SMEs 199
3.2 SME Financings, Local Banks, Rural Areas, and Regional Disparities 199
4. The Banking Market in Germany: Who is Boring? 199
4.1 Structuring the German Banking Market 199
4.2 The Public-law Banking Sector in Germany and the Concept of a Financial Services Network 199
4.3 Lending Structures in the German Banking Market 200
4.4 Identifying Boring Banking: Analysis of Balance Sheet Structures 200
4.5 Profitability of Boring Banking 200
5. Conclusions and Policy Recommendations 201
Bibliography 201