Towards an Assessment of the Benefits of Unlimited Liability Structures in International Banking: The Case of Berenberg

CCRP Working Paper No 31 (November 2017)

22 Pages Posted: 6 Dec 2017

See all articles by Rasheed Saleuddin

Rasheed Saleuddin

University of Cambridge

Jon Stern

City, University of London - Centre for Competition and Regulatory Policy - Department of Economics

Date Written: November 28, 2017

Abstract

This paper examines the implications of Berenberg Bank’s unlimited liability ownership structure for the Bank’s shareholders, other stakeholders, and society at large. It is a case study which draws on interviews with Berenberg Bank’s senior London management, Berenberg is one of the very few remaining financial institutions with an unlimited liability ownership structure. Berenberg prospered during the 2008-9 financial crisis, and has since thrived by expanding in several niche businesses. The paper argues that the Bank’s success during the downturn appears to have been a function of its particular ‘culture’, which in turn appears to be significantly influenced by its unlimited liability capital structure. The paper concludes with some discussion of the relevance of our findings on the debates surrounding the value of such structures and the degree to which they can provide an example to other banks as well as on the implications for the social costs of banking.

Keywords: banking culture, financial crisis, private banks, Berenberg, unlimited liability

JEL Classification: G21, G28

Suggested Citation

Saleuddin, Rasheed and Stern, Jon, Towards an Assessment of the Benefits of Unlimited Liability Structures in International Banking: The Case of Berenberg (November 28, 2017). CCRP Working Paper No 31 (November 2017) . Available at SSRN: https://ssrn.com/abstract=3080900 or http://dx.doi.org/10.2139/ssrn.3080900

Rasheed Saleuddin (Contact Author)

University of Cambridge ( email )

Trinity Ln
Cambridge, CB2 1TN
United Kingdom

Jon Stern

City, University of London - Centre for Competition and Regulatory Policy - Department of Economics ( email )

Northampton Square
London, EC1V 0HB
United Kingdom

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
14
Abstract Views
200
PlumX Metrics