Competition and stability: what's special about banking?

This paper examines the relationship between competition policies and policies to preserve stability in the banking sector. Market structures and the relative importance of the three classical antitrust areas for banking are discussed, showing the predominance of merger review considerations for loan and deposit markets as well as the relevance of cartel considerations for payment systems. A core part of the paper is an analysis of the relative roles of competition and supervisory authorities in the review of bank mergers for the G-7 industrialised countries. A wide variety of approaches emerges, with some countries giving a stronger role to prudential supervisors than to competition authorities and other countries doing it the other way round. In search for explanations for this diversity the theoretical and empirical literature on the competition-stability nexus in banking is surveyed. It turns out that the widely accepted trade-off between competition and stability does not generally hold. JEL Classification: G21, G28, G34, K21, L4antitrust policies, Bank competition, banking supervision, financial stability, mergers & acquisitions

On the importance of being earnest about business: overcoming liberal arts students' misconceptions about leadership in corporate change processes

Unfortunately, most students leave the university with little knowledge about decision-making in the public sector. Unless they study towards a management degree, most students experience little to no business education in their curricula. As a consequence, student perceptions of the business world are largely shaped by the fads and stereotypes propagated in ubiquitous business journals available in every airport bookstore worldwide. Since business plays an integral role in society, such unfamiliarity with business may have global social consequences. This article illustrates how a liberal arts class focusing on Europe’s social and political integration employs a comprehensive case study about a corporate transformation process to provide students with insights into corporate leadership and strategic decision making. The article describes how, by reading and discussing the case study in conjunction with articles about organizational learning theory, students learn to effectively challenge the myths they hold about heroic leadership and the newest management fads. A key element in the course focuses on the role organizational politics plays in developing and implementing a new vision, a new organizational structure, and a new global strategy. -- Obwohl Unternehmen eine wichtige Rolle in der Gesellschaft spielen, werden Studenten außerhalb der Betriebswirtschaft noch zu selten an Fragestellungen aus dem Bereich der Unternehmenspolitik herangeführt. Wie strategische Entscheidungen in der Wirtschaft getroffen und umgesetzt und neue Visionen und Organisationsstrukturen entwickelt werden, sollte deshalb auch in das Lehrangebot für Geistes- und Sozialwissenschaftler aufgenommen werden. Dieser Artikel zeigt beispielhaft, wie Studenten, im Rahmen einer Lehrveranstaltung an einer US-amerikanischen Universität, anhand einer umfassenden Fallstudie über den Transformationsprozess des Pharmakonzerns Hoechst zum Global Player Aventis zur aktiven Auseinandersetzung mit Veränderungsprozessen in Unternehmen angeregt werden, die ganz anders sind, als die oft plakativen Managementlösungen, die die Business-Literatur dieser Tage zu bieten hat.

Service-oriented SCADA and MES supporting petri nets based orchestrated automation systems

The fusion of mechatronics, communication, control and information technologies has allowed the introduction of new automation paradigms into the production environment. The virtualization of the production environment facilitated by the application of the service-oriented architecture paradigm is one of major outcomes of that fusion. On one side, service-oriented automation works based on exposition, subscription and use of automation functions represented by e.g. web services. On the other side, the evolution of traditional industrial systems, particularly in the production area, as a response to architectural and behavioural (functional) viewpoints of the ISA95 enterprise architecture, where a close inter-relation between SCADA, DCS and MES systems facilitate the management and control of the production environment. Automation functions are increasingly performed by the composition and orchestration of services. Among other methods, the application of formal Petri net based orchestration approaches is being industrially established. This paper presents the major characteristics that such a Petri net based orchestration presents when it is developed, implemented and deployed in an industrial environmentThe research leading to these results has received funding from the European Union's Seventh Framework Programme (FP7/2007-2013) under grant agreement 258682 (IMC-AESOP: ArchitecturE for Service-Oriented Process - Monitoring and Control) and 224053 (CONET: Cooperating Objects NETwork of excellence)

The Origins of the German Corporation – Finance, Ownership and Control

The ownership of German corporations is quite different today from that of Anglo-American firms. How did this come about? To what extent is it attributable to regulation? A specially constructed data set on financing and ownership of German corporations from the end of the 19th century reveals that, as in the UK, there was a high degree of activity on German stock markets with firms issuing equity in preference to borrowing from banks, and insider and family ownership declining rapidly. However, unlike in the UK, other companies and banks emerged as the main holders of equity, with banks holding shares primarily as custodians of other investors rather than on their own account. The changing pattern of ownership concentration was therefore very different from that of the UK with regulation reinforcing the control that banks exercised on behalf of other investors

Corporate Control and the Financial System in Germany: Recent Changes in the Role of Banks

The present paper aims to analyze the major changes in the German system of cross-holdings between banks and industrial or financial companies. After an overview on the role of banks in bank-based versus market-based financial systems, and on the German system of corporate control, we focus our attention on the relationship not only between banks and industrial companies, but also between financial companies in Germany. Discussing the reasons for cross-holdings within the financial sector, we hypothesize that cross-holdings are less efficient than full mergers. We analyze hypotheses about the structure of the "Deutschland AG" and about a different role of cross-holdings at different levels of the German financial system. A test of hypotheses on recent mergers and acquisitions in the German financial system yields that they explain some of the changes in the cross-holdings occurred after 1994. We conclude that instead of the often referred "Macht der Banken" the German financial system is characterized by an increasing importance of insurance companies.

Regulation and competition in German banking: an assessment

In Germany a public discussion on the "power of banks" has been going on for decades now with power having at least two meanings. On the one hand it is the power of banks to control public corporations through direct shareholdings or the exercise of proxy votes - this is the power of banks in corporate control. On the other hand it is market power - due to imperfect competition in markets for financial services - that banks exercise vis-à-vis their loan and deposit customers. In the past, bank regulation has often been blamed to undermine competition and the working of market forces in the financial industry for the sake of soundness and stability of financial services firms. This chapter tries to shed some light on the historical development and current state of bank regulation in Germany. In so doing it tries to embed the analysis of bank regulation into a more general industrial organisation framework. For every regulated industry, competition and regulation are deeply interrelated as most regulatory institutions - even if they do not explicitly address the competitiveness of the market - either affect market structure or conduct. This paper tries to uncover some of the specific relationships between monetary policy, government interference and bank regulation on the one hand and bank market structure and economic performance on the other. In so doing we hope to point to several areas for fruitful research in the future. While our focus is on Germany, some of the questions that we raise and some of our insights might also be applicable to banking systems elsewhere. Revised version forthcoming in "The German Financial System", edited by Jan P. Krahnen and Reinhard H. Schmidt, Oxford University Press

Event tracking for real-time unaware sensitivity analysis (EventTracker)

This is the author's accepted manuscript. The final published article is available from the link below. Copyright @ 2013 IEEE. Personal use of this material is permitted. Permission from IEEE must be obtained for all other users, including reprinting/ republishing this material for advertising or promotional purposes, creating new collective works for resale or redistribution to servers or lists, or reuse of any copyrighted components of this work in other works.This paper introduces a platform for online Sensitivity Analysis (SA) that is applicable in large scale real-time data acquisition (DAQ) systems. Here we use the term real-time in the context of a system that has to respond to externally generated input stimuli within a finite and specified period. Complex industrial systems such as manufacturing, healthcare, transport, and finance require high quality information on which to base timely responses to events occurring in their volatile environments. The motivation for the proposed EventTracker platform is the assumption that modern industrial systems are able to capture data in real-time and have the necessary technological flexibility to adjust to changing system requirements. The flexibility to adapt can only be assured if data is succinctly interpreted and translated into corrective actions in a timely manner. An important factor that facilitates data interpretation and information modelling is an appreciation of the affect system inputs have on each output at the time of occurrence. Many existing sensitivity analysis methods appear to hamper efficient and timely analysis due to a reliance on historical data, or sluggishness in providing a timely solution that would be of use in real-time applications. This inefficiency is further compounded by computational limitations and the complexity of some existing models. In dealing with real-time event driven systems, the underpinning logic of the proposed method is based on the assumption that in the vast majority of cases changes in input variables will trigger events. Every single or combination of events could subsequently result in a change to the system state. The proposed event tracking sensitivity analysis method describes variables and the system state as a collection of events. The higher the numeric occurrence of an input variable at the trigger level during an event monitoring interval, the greater is its impact on the final analysis of the system state. Experiments were designed to compare the proposed event tracking sensitivity analysis method with a comparable method (that of Entropy). An improvement of 10% in computational efficiency without loss in accuracy was observed. The comparison also showed that the time taken to perform the sensitivity analysis was 0.5% of that required when using the comparable Entropy based method.EPSR

Globalisation and Its Impact on Competitiveness: the Case of the British and German Pharmaceutical Industry

This paper assesses the degree of financial and economic globalisation of British and German pharmaceutical companies during 1990 and 2001 and explores the changing balance between globalisation and national embeddedness. It tries to explain both the much lower degree of globalisation of German as compared to British companies in 1990, as well as their catching up at the beginning of the 21st century. The paper suggests that the lesser degree of globalisation of German firms during most of the 1990s partly explains their slide in competitiveness during this period. The conclusion examines prospects for the future of firms in both economies. The paper draws on detailed industry data, as well as case studies of the major firms in the two national industries.globalisation, pharmaceutical industry, performance, British-German comparison

Technology assessment of advanced automation for space missions

Six general classes of technology requirements derived during the mission definition phase of the study were identified as having maximum importance and urgency, including autonomous world model based information systems, learning and hypothesis formation, natural language and other man-machine communication, space manufacturing, teleoperators and robot systems, and computer science and technology