IntroductionFew domestic financial markets in the world show such rapid and far-reaching changes in their legal framework as the German capital markets currently do. On the one hand, the European liberalization and harmonization process with regard to banking and financial services, particularly in the area of regulatory law, required and continues to require the implementation of various EC directives into German national law. On the other hand, the German government, realising the increasing competition between financial centres around the world, attempts to promote Germany, and especially Frankfurt, as its financial centre by abolishing unnecessary statutory and administrative restrictions and by a perceptible orientation towards international capital markets standards. The forthcoming amendment to the Banking Act and the proposed new Financial Market Enhancement Act, which are discussed in this report, supply impressive evidence for the legal adaption of Germany's financial and capital markets. This adaption, however, should not be misunderstood as a mere liberalization or even deregulation of such markets' legal framework. The sheer volume of the relevant legislative measures the draft Financial Market Enhancement Act, for example, comprises 392 pages, the initial draft of the amendment to the Banking Act more than 800 pages - indicates that a rather heavy burden is placed on banks, financial institutions and other market players when it comes to implementing and complying with the new rules. |