What Constitutes a Financial System in General and the German Financial System in Particular?

Abstract

AbstractThis is one of the two introductory chapters of the book. It first discusses what the term ‘financial system’ means and why the financial system of a country is important and for what it might be important and how a given financial system can be analysed, and provides a general overview of the German financial system. As in the entire book, the term financial system is used in this chapter in a broad sense, which sets it apart from the narrower concept of the financial sector and which includes, among other things, the demand for financial services, corporate governance, and financial accounting.Presents four approaches to analyse a financial system and applies them to the case of the German financial system. In addition, it provides a first indication of how the various elements of a financial system are related to each other and thus supports the claim that there is some merit in emphasising the systemic features of financial systems in general and that of Germany in particular.