Comparative and Foreign Law Commons^™

Bridge Banks: Detox Tools For A Melted Economy, Gabriela Steier

Gabriela Steier

This paper compares the fragmented three-pillar banking system in Germany to the banking system in the U.S. and suggests an amendment to 12 U.S.C.A. § 1821(n), the bridge bank statute, to make some fragmentation of the financial sector in the U.S. possible. This paper is the first of its kind and explains why the German bad bank prototype works within the fragmented three-pillars of banking. The three pillars of banking in Germany are (1) Savings Banks (Sparkassen), (2) Private Commercial Banks (Kreditbanken, Genossenschaftsbanken), and (3) Public and Cooperative Credit Institutions (Volks- and Raiffeisenbanken). The resulting fragmented banking system is more …