Corporate Governance Regulation and Financial Markets. Germany's Pathway to a Market-Based System?

Seminar paper from the year 2015 in the subject Economics - Finance grade: 13 University of Leipzig (Wirtschaftspolitik) course: Development of Financial Markets and Institutions language: English abstract: Few areas of business economics are discussed in such a controversial manner as different corporate governance systems. In a globalized age in which the capital markets of industrialized countries have a large operating range and a growing degree of internationalization the design and regulation activities in this field have become increasingly important. This has triggered a competition of institutions. In the current academic discussion different corporate governance paradigms are being examined to figure out which could be the most successful in a market economy in order to attract investors. It considers what system of management of a capitalled company is the most appropriate - in order to provide a location or rather a country - a competitive advantage in competition for global players. It is assumed that the type of the corporate governance system influences the company's success or even more on the entire national economy. As reference points the German and the US model are often being used. Since they are opposed to one another in their paradigmatic and thus embody the exemplary corporate governance system. In addition since the Cold War and beyond the US has been a hegemon and has always had a great influence on the economic and financial system worldwide. Germany is regarded as the political and economic core of the most important partner of the USA the European Union. Both are regarded as a highly developed economic system; their further development will attract attention beyond their national borders. Although the aim of corporate governance is identical the institutional design and the underlying philosophies differ. As of a 1980´s it appears that the German bank-based system cannot meet the needs of the swift progress of