Comparative Analysis of the Banking Systems in the United States and Germany

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NATIONAL RESEARCH UNIVERSITY HIGHER SCHOOL OF ECONOMICS
School of World Economy and International Affairs
Foreign Languages Department

Comparative analysis of the banking systems in the United States and Germany

Emma A. Mkrtchyan
group 429

Academic Advisors

Prof. Valentin M. Kudrov, PhD
Prof. Elena V. Anashkina, PhD

MOSCOW 2013

Abstact.
The paper compares the banking system of the United States of America and Germany. It is aimed to state differences in banking structures and reveal their efficiency. The first part of a research examines the banking structure and the financial crisis in the United States of America. The second part is dedicated to the similar subjects in Germany. The third part of the paper emphasis the striking points in efficiency of both banking systems based on the method of a comparative analysis.

Key words: banking system, Federal Reserve system, regulation, central bank, crisis Contents

Introduction…………………………………………………………………….…4 1. The United States of America………………………………...………….…5 1.1. The structure of the banking system………….……………………….…….5 1.2. Financial Crisis in the USA…………………...…………………………....6 2.Germany……………………………………………...…………………….7 2.1.The structure of the banking system…………………………..……….......7 2.2.Financial Crisis in Europe…………………………………………………9 3. Striking points……………………………………………………………10 Conclusion……………………………………………………………………….11 References……………………………………………………………………….13

Introduction.
Banking systems have always played an important role in any economy, as they are an essential part of stability and welfare of a country. The question of efficient banking systems is especially topical today because of the unstable situation on the global market. Firstly, the financial crisis that started in the United States in 2006 rapidly acquired global scale. Then it was followed by the European crisis in 2009, starting with Greece revealing its economic problems. The paper takes a closer look at the banking systems of the United States and Germany, as countries with the strongest economies in the world and analyzes the details of the above-mentioned crises. Many researches are dedicated to this topic in order to find out the causes of the crisis, which makes this paper relevant. The paper brings novelty by providing comparative analysis of two absolutely different banking systems. The subject of the paper is banking systems in developed countries. The topic goes for banking systems of the USA and Germany. Comparing two banking systems is the main purpose of the paper. To achieve this purpose the following objectives are set: * describe the srtucture of banking systems,

* analyze causes of crisis,
* compare the taken measures,
* provide forecast.
The thesis of the synopsis is that despite America’s economy being so strong, Germany’s financial system is more stable. This paper can be used as a source during the classes, which defines her practical applicability. The methodology of the paper is the method of a comparative analysis based on library and Internet recourses. As for literature review - except for two books that describe the basic structure of banking systems, all information is from 2010 to 2012 as economy has been trough several crises lately.

1. United States of America
1.1 The structure of the banking system.
The Federal Reserve System is a central banking system of the United States that is composed of five parts: 1. The Board of Governors
2. The Federal Open Market Committee (FOMC)
3. Twelve regional Federal Reserve Banks
4. Numerous other private U.S. member banks, which own required amounts of non-transferable stock in their regional Federal Reserve Banks. 5. Various advisory councils
The Board of Governors consists of 7 members appointed by the President for 14 years. It is the main body of the Federal Reserve System whose main function is overseeing 12 regional Federal Reserve Banks and...
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