Internationale Finanzmärkte unter Innovations- und Liberalisierungsdruck

Abstract

International Financial Markets under Innovation and Liberalization Pressure

Since the early eighties both national and international financial markets have been characterized by a wave of financial innovations, diminishing the hitherto existing separation between domestic and foreign Euromarkets, between credit and capital markets as well as between markets of different currencies. The reasons for this development are on the one hand the regulation and segmentation of certain markets, which led to an innovation pressure the result of which was the creation of new products. The growing deregulation of the financial markets in the United States, Great Britain and Japan made it possible to combine such products in a complementary way. On the other hand, tighter banking supervisory regulations and decreasing earnings in the Euroloan business intensified the off-balance-sheet activities. This development is characterized by a market split parallelled by a changing role for the banks: As far as first-class borrowers are concerned, banks are increasingly assuming a broker function instead of a transformative function. This trend suggests that in future first-class borrowers will no longer arrange their financing exclusively through banks, but will also make growing use of other ‚facilities. At the outset it must be noted, however, that there are limits on the replacement of traditional credit business by the new products. These limits are highlighted when the continued participation of the banks is sought – at concessional rates – despite the usage of instruments which tend to overly benefit the investor. Cases in point here are some forms of Euronotes. This will either lead to compensation being paid to the banks according to the risk involved, or to constraints being placed on the freedom of banks to take part in such arrangements. Such a development appears all the more likely considering the fact that the monetary and supervisory authorities are bound to intervene at some stage. The former will feel themselves called upon to react, as the new products not only affect the informatory value of the money supply, but also impair the transformative process of the monetary policy measures. The banking supervisory authority will become active on account of the new risks, in particular with a view to the back-up facilities, which are to be considered as contingent liabilities and which are held by the. underwriters for usage by the borrowers, as up to now these facilities have not yet been subject to the risk limiting rules of the German banking law principles.