For the views of Italy's minister for European affairs on cross-border mergers, see Giorgio La Malfa, "Cross-border M&A does not suit most banks," Financial Times, 2 June 2005, 15.
Most interesting part: "Finally and crucially: the bigger, the less flexible. There are specific, lcoal circumstances even for banking. Italy's industrial production, and with it a large share of the country's wealth, is based on small and medium-sized enterprises, often clustered in lcoal districts. Most of these companies are too small to raise capital on the markets. Access to credit is their lifeline. And local banks have traditionally provided this credit. They have developed over the years a detailed knowledge of their clients' needs that is hard to replace. It is thus a legitimate concern that flexibility and specialisation could be lost in the process of banking consolidation."
There's now a large political-economy literature on flexible specialization as a mode of production in Italy (for an early example, see Charles Sabel and Michael Piore, The Second Industrial Divide).
Access to local knowledge and large-scale banking are not necessarily incompatible, however. Case in point: At the Business History Conference in Minneapolis last month, I heard a paper (by Fed Reserve scholars, if I remember right) on bank branching via merger in California. There the parent banks have tended to retain local executives and managers precisely because of their detailed knowledge of the local community.
Wednesday, June 15, 2005
Pressures for federal regulation of American insurance companies
Joseph B. Treaster, "Coalition Seeks a Federal Insurance Regulator," New York Times (natl. ed.), 15 June 2005, C5.
Here's an(other) instance of business pressure for federal in place of state regulation. Business interests (at least the big players) seem fairly united behind the initiative to create "an efficient, uniform regulatory structure" nationwide in place of the usual "patchwork" or "mosaic" of regulation by 50 states (the article doesn't use the latter terms but they are typically used by critics of state regulation). The proposed solution is to give companies the option to be regulated by Washington or their home state. Critics suspect that insurers and bankers see federal regulation -- in the current political environment in Washington -- as a means of deregulation. "'If the federal government was a little less laissez-faire, the insurers and banks wouldn't be doing this,' said J. Robert Hunter, insurance director at the Consumer Federation of America."
The American practice of leaving incorporation policy and broad areas of regulation (insurance, banking) to the state governments seems increasingly anachronistic in an age of globalization. But in many ways it serves effectively to minimize regulation because the state governments have encountered serious legal-structural or political obstacles to regulation since the 1850s.
Background reading on insurance: Peter J. Wallison, ed., Optional Federal Chartering and Regulation of Insurance Companies (Washington, D.C.: The AEI Press, 2000).
Well, so much for my effort to write expediently!
Here's an(other) instance of business pressure for federal in place of state regulation. Business interests (at least the big players) seem fairly united behind the initiative to create "an efficient, uniform regulatory structure" nationwide in place of the usual "patchwork" or "mosaic" of regulation by 50 states (the article doesn't use the latter terms but they are typically used by critics of state regulation). The proposed solution is to give companies the option to be regulated by Washington or their home state. Critics suspect that insurers and bankers see federal regulation -- in the current political environment in Washington -- as a means of deregulation. "'If the federal government was a little less laissez-faire, the insurers and banks wouldn't be doing this,' said J. Robert Hunter, insurance director at the Consumer Federation of America."
The American practice of leaving incorporation policy and broad areas of regulation (insurance, banking) to the state governments seems increasingly anachronistic in an age of globalization. But in many ways it serves effectively to minimize regulation because the state governments have encountered serious legal-structural or political obstacles to regulation since the 1850s.
Background reading on insurance: Peter J. Wallison, ed., Optional Federal Chartering and Regulation of Insurance Companies (Washington, D.C.: The AEI Press, 2000).
Well, so much for my effort to write expediently!
HVB Group-UniCredito merger
Heather Timmons, "2 European Giants Betting Banks Can Blur Borders," New York Times (natl. ed.), 15 June 2005, C6. Cross-border (German-Italian) bank merger.
Click here for the geneaology of the HVB Group. HVB = Hypo- und Vereinsbank or HypoVereinsbank, and its lineage extends back to the Bayerische Hypo- und Wechsel-Bank AG (1835). The HypoVereinsbank headquarters in Munich had rather extensive archival records, but when I worked in them in the late 1990s, there was a good possibility that the archive would be closed as a cost-cutting measure. Whether that has happened, I don't know, but it would be a significant loss for historians.
Click here for the geneaology of the HVB Group. HVB = Hypo- und Vereinsbank or HypoVereinsbank, and its lineage extends back to the Bayerische Hypo- und Wechsel-Bank AG (1835). The HypoVereinsbank headquarters in Munich had rather extensive archival records, but when I worked in them in the late 1990s, there was a good possibility that the archive would be closed as a cost-cutting measure. Whether that has happened, I don't know, but it would be a significant loss for historians.
Changing format
Well, my plans for this blog clearly aren't working out the way that I had envisioned. I just can't seem to find time to write up reflective notes about news items that are relevant to my research or teaching, and if I can't do it in the summer, when will I ever be able to? But I don't want to revert to clippings, since I can never find time to organize them either; they just sit around in piles on my desk.
So -- with due apologies to anyone who may have been "listening in" on my browsings -- I'm going to take a more expedient approach. I'll just make brief note of news articles and indicate ever so briefly (cryptically?) why they are interesting. Now let's see if that's a more effective way of keeping track of useful news.
So -- with due apologies to anyone who may have been "listening in" on my browsings -- I'm going to take a more expedient approach. I'll just make brief note of news articles and indicate ever so briefly (cryptically?) why they are interesting. Now let's see if that's a more effective way of keeping track of useful news.
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