Organized Equity Markets in Germany

36 Pages Posted: 26 Aug 2003

See all articles by Erik Theissen

Erik Theissen

University of Mannheim - Finance Area

Date Written: March 2003

Abstract

The German financial system is the archetype of a bank-dominated system. This implies that organized equity markets are, in some sense, underdeveloped. The purpose of this paper is, first, to describe the German equity markets and, second, to analyze whether it is underdeveloped in any meaningful sense. In the descriptive part we provide a detailed account of the microstructure of the German equity markets, putting special emphasis on recent developments.

When comparing the German market with its peers, we find that it is indeed underdeveloped with respect to market capitalization. In terms of liquidity, on the other hand, the German equity market is not generally underdeveloped. It does, however, lack a liquid market for block trading.

Keywords: Market size, liquidity, floor versus screen trading

JEL Classification: G51

Suggested Citation

Theissen, Erik, Organized Equity Markets in Germany (March 2003). Available at SSRN: https://ssrn.com/abstract=427020 or http://dx.doi.org/10.2139/ssrn.427020

Erik Theissen (Contact Author)

University of Mannheim - Finance Area ( email )

Mannheim, 68131
Germany

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