Diagnosis, Therapy and Prophylaxis of Banking Crises - Challenges in Financial Supervision and Monetary Policy

The difficult situation of the German banking sector at least according to the basic tenor of many contributions is raised to the threatening ranks of the "disease" the Japanese banking industry is suffering from. Such a statement labelling "German banks Turning Japanese" is the very issue of a Merrill Lynch study of equal title. Crises of individual German banks can not be denied, and it is also visible that the size and number of affected institutes in the recent past has increased. However, this paper finds weighty differences beyond the revealed symptoms between Japan's system crisis and the structural crisis in German banking. With regard to possible therapies, the authors favour a stronger strategic focussing to remove earnings-related problems of German banks