Embed Size (px)
Citation preview
Michael H. Grote slide 1
The rise (and fall?) of the Financial Center Frankfurt
Locations of Foreign Banks in Germany 1949-2003
Michael H. Grote
Johann Wolfgang Goethe-Universität Frankfurt a.M.
Vortrag im Rahmen der 90-Jahr Feier der Johann Wolfgang Goethe-
Universität Frankfurt
7. Juli 2004
Michael H. Grote slide 2
setting
national financial players tend to concentrate
GB London J TokyoD Frankfurt US New York, ChicagoF Paris etc.
borders are vanishing
introduction of Euroderegulation
information and communication technologies
ubiquitous & instant information remote access what will happen to national financial centers in EU?
Michael H. Grote slide 3
literature
literature on financial centers is focusing on static phenomena
why there are financial centers at all? micro-economic view on agglomeration effects
why do they occur in certain countries? macro-economic studies to isolate national factors
development of financial centers almost absent from the literature
Michael H. Grote slide 4
U
the decline of agglomerations is not very well addressed
new economic geography: U-shaped development
share
of
reg
ion
1 r
esp
. 2
of
man
ufa
ctu
rin
g s
ect
or
level of transport costs
share of region 1
(= success)
share of region 2
(= failure)
0,5
historical accident~ window of opportunity
Michael H. Grote slide 5
why Frankfurt?
Frankfurt
by far the predominant financial center in Germany, second in Europe
got predominant position in Germany only after World War II from Berlin, starting virtually from scratch
emerged after a competition between several cities
almost a laboratory case for financial center development:
is interesting on its own, but
serves as a test for theory
Michael H. Grote slide 6
historical accident
before World War II, Berlin was the leading financial center in Germany but was not able to continue this function afterwards three cities were in competition for succession:
Düsseldorf by far largest industrial hinterland (Ruhrgebiet)
share of lending activties almost 40% in West Germany after war
functioning payment system
Frankfurt central location
location of American military headquarter…
got seat of central bank in 1948
starting point for development
Hamburg second biggest center
large banks had moved departments from Berlin
Reichsbank also
more stock exchange turnover than all others combined after war
less destroyed than others
port
Michael H. Grote slide 7
Subsidiaries and Branches of Foreign Banks in Germany (Shares of Financial Centers and Total Number)
0%
10%
20%
30%
40%
50%
60%
70%
80%19
49
1952
1955
1958
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
Sh
are
0
20
40
60
80
100
120
140
160
180
200
Nu
mb
er
Frankfurt Hamburg Düsseldorf Köln Total
total number (right scale)
Michael H. Grote slide 8
Subsidiaries and Branches of Foreign Banks in Germany (Shares of Financial Centers and Total Number)
0%
10%
20%
30%
40%
50%
60%
70%
80%19
49
1952
1955
1958
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
Sh
are
0
20
40
60
80
100
120
140
160
180
200
Nu
mb
er
Frankfurt Hamburg Düsseldorf Köln Total
total number (right scale)
Michael H. Grote slide 9
Locational-Herfindahl-Index (LHI) of Foreign Banks in Germany
0,1
0,2
0,3
0,4
0,5
0,6
0,7
1949
1952
1955
1958
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
LHI Representative Offices
LHI Subsidiaries and Branches
LHI Composite Index
… inverted U-shape
Michael H. Grote slide 10
U-shape and U-shape?
GER
EU
transport cost
Fran
kfu
rt‘s
sh
are
of
ban
ks
at
…
scale
?
?
transport cost
Michael H. Grote slide 11
Thank you for your attention!
Michael H. Grote slide 12
The rise (and fall?) of the Financial Center Frankfurt
Locations of Foreign Banks in Germany 1949-2003
Michael H. Grote
Johann Wolfgang Goethe-Universität Frankfurt a.M.
Vortrag im Rahmen der 90-Jahr Feier der Johann Wolfgang Goethe-
Universität Frankfurt
7. Juli 2004
