In Europe, and especially in Germany, corporate finance is widely viewed as being dominated by banks. With the tightening of bank regulation in recent years there is a danger that access to credit will become more difficult. However, many enterprises have already improved their creditworthiness by increasing their equity capital ratios and by diversifying their short-term funding. While banks will continue to play a major role in providing long-term loans, capital markets are especially suited to equity funding. Overall, German companies are characterised by a robust financing structure, through which they are well-equipped for future investment.

The Development of Corporate Finance in Germany
IW-Trends
German Economic Institute (IW)

Daniel Bendel / Markus Demary / Michael Voigtländer: Entwicklung der Unternehmensfinanzierung in Deutschland
IW-Trends
German Economic Institute (IW)
More on the topic

Financing Gaps of Companies during the Covid-19 Pandemic
For firms’ business and investment decisions their access to finance is a critical determinant. In times when access to finance becomes tight, corporations face either higher capital costs or they have to postpone their investment decisions when credit lines ...
IW
The new inflationary environment: How persistent are the current inflationary dynamics and how is monetary policy expected to respond?
We argue that the period of low inflation has come to an end based on six structural factors, which define the new inflationary environment.
IW