KREDIT und KAPITAL - Issue 4/1975



Johnson, Harry G.
An Overview of the World Crisis and International Trade

Fautz, Wolfgang M.
Analyse einer geld- und kreditpolitischen Konzeption der Deutschen Bundesbank für die Jahre 1958 bis etwa 1970

Bronfenbrenner, Martin
Thomas Mayer on Monetarism

Steinherr, Alfred
Probleme der Indexbindung: Versuch einer Bilanz

Mülhaupt, Ludwig and Dolff, Peter
Die Zielplanung in Genossenschaftsbanken

Krümmel, Hans-Jacob
Bankpolitische Normen und ihre Wirkungen auf das Bankgeschäft


Meichsner, Vjekoslav
Ausländische Kapitalbeteiligungen in Jugoslawien (joint venture)

Book Reviews

Fassbender, Heino
Zur Theorie und Empirie der Fristigkeitsstruktur der Zinssätze (Margit Gregor)

Grimberg, Rainer
Rechtsprobleme der Swapsatzpolitik der Bundesbank - Legitimation und Rechtsnatur (Hugo J. Hahn)

Cremer, Claus
Grundfragen einer Theorie der optimalen Finanzierung (Oswald Hahn)

Ketterer, Karl-Heinz
Probleme der Neo-Quantitätstheorie und der Geldmengenpolitik (Hermann Remsperger)


Johnson, Harry G.
"An Overview of the World Crisis and International Trade"

The subject of this study is the grounds for the worldwide crisis and their repercussions on international trade. Central importance is assigned to the question of how it was possible for inflation and underemployment to coincide- and that in a world which, through giving up fixed exchange rates, is meanwhile capable of protecting itself against inflationary influence from abroad.

In the introduction, it is first made clear that the gold exchange standard, too, and the related system of fixed exchange rates, exerted no compulsion to preserve stability, but merely demanded a certain degree of uniformity of inflation rates. But even a system of floating exchange rates is no safeguard against inflationary disturbances, if the floating is predominantly of the "dirty" type. An additional facet is the tendency of central banks to behave in a system of freely fluctuation exchange rates in the same way as when fixed exchange rates prevail, since their attention is focused primarily on exchange rate changes relative to their neighbouring countries.

The chief source of world inflation was the fact that the United States failed to finance the Vietnam war by tax increases. With exchange rates fixed, the overproduction of dollars necessarily had to spread over the whole world. This inflationary effect was ameliorated only by the substantial devaluation of the dollar. The European countries, however, did not take full advantage for stabilization policy of the latitude they were given by the measures of August 1971. The possibility of overcoming world inflation is derived above all from the changed attitude of the American administration to inflation and from the circumstance that this will exert a damping effect on other countries.

The study concludes with thoughts on the influence of the oil crisis on inflation. It is shown that this influence would have been limited, if this problem had been tackled with the knowledge from cartel theory and practice. It was not until the attempt was made to combat the consequences of oil price increases with subsidies that its price-raising influence was strengthened.


Fautz, Wolfgang M.
"An Analysis of the German Bundesbank's Conception of Monetary and Credit Policy for the Period from 1958 to about 1970"

The discussion of the structural features of the German Bundesbank's conception of monetary and credit policy, which is presented here, brings some serious defects to light. They are primarily attributable to the circumstance that analytical interest centres exclusively around a specific causal connection (the fundamental relationship presented in equation (8) between availability of free liquidity reserves and the conditions on the money and credit markets) and that it is not appreciated that the chosen indicator is an endogenous variable the value of which derives from the interplay of political and autonomous forces. Only a coherent hypothesis which makes adequate allowance for the interdependencies can cast light on the properties of certain variables and on their suitability as indicators. Only after carrying out such analytical preliminary work is there any point in making empirical tests of the suitability of various variables as indicators, if one wishes to avoid lapsing into naive empiricism divorced from theory.


Bronfenbrenner, Martin
"Professor Mayer on Monetarism"

This paper is basically a set of commentaries and notes on Professor Mayer's, and cannot claim significant independent content of its own. The digest which follows is accordingly diffuse and disorganized.

Section I, II, and VIII are of introductory and summary character. They argue that Mayer's essay is well worth the effort required for its preparation, but that it is inevitably subjective and cannot preclude similar exercises by other scholars seeking to define monetarism.

Section III suggests that the antithesis of "monetarism" should perhaps be "fiscalism" rather than "Keynesianism", and (in Note 4) compares positive and normative forms of fiscalism. It also suggests that there may be a continuum between extreme fiscalist and extreme monetarist views, rather than the bunching at the two extremes which Mayer's paper seems to imply.

Section IV develops a distinction between the stability and the volatility of economic functions, which the writer would like to see reflected in much macroeconomic writing, including Mayer's.

Section V approves, on essentially Schumpeterian grounds, Mayer's inclusion among the differentia specifica of monetarism of several subordinate propositions which do not follow rigorously from his major postulates and which are not universally accepted by monetarists. Section 6 goes on to add (at least for the U.S.) another subordinate proposition to Mayer's group, namely, that the monetary authority has the power and responsibility for monetary regulation.

Section VII takes several minor exceptions to specific points in Mayer's analysis, including (1) treatment of Pigou and Keynes effects, (2) compromises between a Friedman-type monetary rule and complete discretion, and (3) the role of Phillips curves.


Steinherr, Alfred
"Index-Linking Problems: A Tentative Stocktaking"

This essay ventilates the chief arguments presented in a supplement to Kredit und Kapital ("Problems of Index-Linking", No. 2, Berlin 1974). In the interests of conciseness, the study abstains from any comprehensive discussion of index-linking and only goes into the related problems affecting wage and salary payments, tax burdens and savings deposits. The main interest is focused on distributive and allocative effects, effects on price movements and on overall economic equilibrium.

The arguments advanced by us reduce and blunt the edge of the criticism and scepticism often directed against index-linking. In particular, fears that index clauses would only aggravate the upward trend of prices and drastically diminish the willingness of entrepreneurs to invest are largely unfounded. It is also shown that the various sectors of the economy are affected to varying degrees by the upward price trend. Index clauses, on the other hand, would render it possible to make necessary corrections. This is made clear especially with respect to short- and long-term credit business.

The conclusion drawn from our study is that index clauses are certainly no panacea, but nevertheless a useful enrichment of the instruments of trade cycle and structural policy. They could contribute substantially towards combatting inflation and at the same time ameliorate the allocation and distribution disadvantages of the inflationary process.


Mülhaupt, Ludwig and Dolff, Peter
"Objective Planning in Co-operative Banks"

The use of planning as an instrument of management raises special problems in co-operative banks, because on the one hand it requires substantial research expenditure, while on the other hand a very large number of co-operative banks have balance sheet totals of less than DM 100 mill. A way out of this conflict is offered by co-operation, which may also take the form of support from the pertinent associations.

The objective system of a bank is developed in a two-stage decision process. In the first stage, the prime objective of the bank is formulated from its basic object. In the second stage, divisional or departmental objectives are derived from the prime objective for all spheres of banking activity by way of agreement, in order to develop a closed, conflict-free objective system, to co-ordinate all sub-decisions and orient them to the prime objective.

Under § 27, para. 1 of the Co-operatives Act, responsibility for laying down the prime objective of co-operative banks rests exclusively with the managing board, though its management activities are subject to the control of the supervisory board. The supervisory board must assess managerial planning according to whether the planned measures are suitable to achieve the basic co-operative object. Under § 1 of the Co-operatives Act, that object consists in "promoting the gainful activity or business of its members by means of a collectively owned business undertaking". This basic object must be translated by the management into operational objectives. In the long run, however, that basic object can be achieved only if the existence of the institution is secured. Hence additional security objectives must be formulated.

In the second phase of objective planning, specification of divisional objectives (budgeting), exactly quantified objective agreements must be reached with the division managers. Essentially, such budgeting consists in estimating planned objectives and specifying them for the various spheres, comparison with the results achieved, i. e. actual figures compared with target figures, and analysis of deviations from the budget.

Either special planning departments or planning committees can be entrusted with elaborating the budgeting system. A single drafting, once and for all, of such a system by a planning committee should be possible also in small banks, as the organizational effort is limited.


Krümmel, Hans-Jacob
"Banking-policy Standards and their Effects on Banking Operations"

Protection of the depositor is among the primary banking-policy aims that can be pursued by the legislator. Up to now in the Federal Republic of Germany solvency protection has been the means of indirect depositor protection practised by the credit institutions. The basis for this was and still is formed mainly by the risk-related standards of the law on credit affairs (KWG; § 10 et seq.) and the subsequent standards issued by the Federal Supervisory Board for Credit Affairs (Bundesaufsichtsamt für das Kreditwesen). The author has shown in this magazine (1/1968) that indirect depositor protection effected by means of solvency protection should exhaust all possibilities which would result in the credit institutions being able to call on sufficient funds to meet all depositors' demands, even in the case of a run on the bank - induced by either credit losses, other financial losses of the bank or rumours of losses. The only attempt to have been made on this problem on any comprehensive scale to date is the so-called "depositor protection balance" by Wolfgang Stützel.

As a result of the spectacular bank losses of 1974 the idea of direct depositor protection by means of deposit protection systems now plays a more important role than ever before in discussions on banking policy. If it should prove possible to introduce an efficient group deposit protection system for the banking business as a whole or deposit protection systems of the individual groups of institutions (the latter is just being put into effect) a new situation would arise with regard to the solvency protection standards of the law on credit affairs. The risk cover standards of the law on credit affairs (KWG) need in that case - provided the deposit protection systems are really efficient - no longer be designed for the case of a run. They then take on the characteristics of standards of good conduct for the members of the deposit protection systems.

In the above essay the author discusses the basic conditions for the efficiency of a group protection system.

He goes on to develop certain principles where by the standards for the law on credit affairs (KWG) may be reformulated as good conduct regulations relating to the credit institutions whose depositors are protected by means of a direct deposit protection system. When formulating such standards three groups of problems are encountered:

- the adequate determination of facts relevant to the protection System;
- the adequate connection of facts relevant to the protection system;
- the determination of the protection level as a measure of the "representative risk aversion" of the legislator transposed into the standards.

In the last part of the essay the effects of banking-policy standards and their changes are discussed.



Meichsner, Vjekoslaw
"Foreign Capital Participations in Yugoslavia (Joint Ventures)"

Following a brief review of the legal regulations governing foreign capital participations in Yugoslavia (so-called joint ventures), the various controversial problems arising from the difference between the legal and economic forms of organization in a socialist society on the one hand and the western market economies an the other are dealt with from the theoretical standpoint and practical solutions are demonstrated. The chief theoretical problem is that of ownership and the related legal nature of the foreign share in a Yugoslavian joint venture. Other aspects that are of equal importance for the foreign investor, however, are the questions of control and management of the joint venture, and also the liability and taxation of the foreigner. Without departing from the principles laid down in the constitution, the Yugoslavian legislature has granted the foreign partner practically almost the same rights as he would have had, if, with his participation, he had received private co-ownership of the enterprise. Thanks to the fact that the law has left the settlement of numerous individual questions to the parties, the latter have in many cases found ingenious solutions for achieving a mutual balance of interests. Proof of this may be seen in the fact that the existing joint ventures are flourishing economically and that so far no disagreement has arisen. Macroeconomically, however, the success has been more modest. Although the number of registered agreements (over 120) may be regarded as far from insignificant, interested foreign investors are hesitant. For all that, the system should be retained and perfected by clarification of still controversial points by the official agencies. This would also be in conformity with OECD aims. For on the whole, the Yugoslavian experiment with joint ventures has shown that fruitful economic co-operation between East and West is possible, if limited to purely economic goals.