MP wrote:
>Is there a good article on Allianz's influence on the German economy?
Yes, but Petchy hasn't finished writing it yet :-) See below ...
CB said:
> This "releases share-holder value" and is the decisive switch to the
>domination of a pure anglo-saxon type of finance capital dominated
economy.
and DR replied:
>I don't buy this. There's not a great deal of evidence that Eurocapital is
>going down the US road to rentier ruin and foreign indebtedness; [....]
>Rolf Breuer & Co. are smarter than this.
There's a lot to be said for Dennis' thesis about European bank driven capitalism (a lot of it is said on Brad DeLong's website at http://econ161.berkeley.edu/TotW/haas_equity.html ). But you can't claim Breuer onto your side because he's basically bet the bank that Anglo-American markets are the way of the future. The motivation behind the D/D merger is that a) the Mittelstand is currently bank financed, (and) b) similar American companies are quoted (so) c) the Mittelstand will be quoted in the future, so d) investment banks in Germany are going to make out like bandits. Deutsche and Dresdner are merging to combine their distribution networks so that they can lead manage bond and equity issues rather than taking a place low down in the syndicate.
If you want to look for a euro-keiretsu, the place to look is Spain. Don Emiliano Botin of Banco Santander Centrale Hispano has put together a network of European banks (SocGen, Royal Bank of Scotland, NatWest, Commerzbank, San Paolo di Torino), held together by cross-shareholdings and given to assisting one another in bid battles. BSCH recently contributed US$1bn to RBOS' takeover of NatWest, financing it by a rights issue which never touched the market -- it was all financed by partner companies. That's bank-driven capitalism.
Anyway, the deal with Allianz is that they own so much of corporate and financial Germany that they can often block any deal that anyone else wants to do. Achleitner, the CFO of Allianz is an ex-Goldmoonie (so no friend of Eurocapitalism there), but is capable of cutting a hell of a deal when he wants to (hence my intimation in the equations that he was effectively CEO of Dresdner Bank). This deal shows how much raw power Allianz holds -- in return for effectively doing nothing other than refraining from pissing on the deal, they got an incredibly sweet position, taking 40% of the retail banking operations of the two banks, and effecitvely being given the insurance subsidiary of Deutsche. They're pretty tough. Unfortunately, they have a pretty appaling (and as yet unsettled) war record, so it's not beyond the bounds of possibility that their involvement will bring the WJC into the picture.
cheers
dd
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