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Banking regulation in a federal system: lessons from American and German banking history

Krieghoff, Niels (2013) Banking regulation in a federal system: lessons from American and German banking history. PhD thesis, The London School of Economics and Political Science (LSE).

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Abstract

This dissertation contrasts the development of the regulatory structure of the American and German banking systems until the mid-20th century. It explains why the countries' regulatory structures diverged into diametrically opposite directions, even though both countries had federal political systems and regularly observed the developments in the other country. Furthermore, after the Second World War, the American military government was even able to mold the German banking system into an idealized version of the American one. The thesis also provides an explanation why this assimilation attempt ultimately failed, and why there was a strong institutional persistency between Nazi Germany and West Germany instead. The original contributions to knowledge are the following: (1) This thesis offers a novel perspective on the evolution of the structure of American banking regulation by interpreting it as being largely driven by constitutional conflict (2) it shows that prior to the Banking Crisis of 1931 there was no intention to introduce a comprehensive regulatory structure for the banking sector in Germany (3) It provides a reassessment of the origins of the German Credit Act of 1961 as a non-deterministic process (4) It interprets German banking regulation after the Second World War as a failed Institutional Assimilation, which provides evidence that the decentralized regulatory arrangement of the American banking system was held in place by strong states' rights. In the absence of strong states' rights such a system would not persist and, indeed, in Germany it did not (5) It re-interprets German post-war economic history as being driven by the need of the German federal government to re-establish supremacy over economic matters. This assigns a new important role for Ludwig Erhard in German post-war competition history, as being an enabler of liberalization rather than being a liberalizing force himself.

Item Type: Thesis (PhD)
Additional Information: © 2013 Niels Frederik Kreighoff
Library of Congress subject classification: H Social Sciences > HG Finance
Sets: Departments > Economic History
Supervisor: Ritschl, Albrecht
URI: http://etheses.lse.ac.uk/id/eprint/758

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