German banks are able to control a significant number of German firms by
A) making large syndicated loans.
B) ownership of shares alone.
C) ownership of shares and having proxy voting power over the shares in their custody.
D) sheer size in the lending market.

Question

Quizplus · Accepted Answer

German banks are able to control a significant number of German firms by owning shares of these firms and having proxy voting power over the shares in their custody. This setup allows banks to have a say in the decision-making processes of the firms they invest in without having to own a majority share. This phenomenon is known as the "Deutschland AG" system, where a group of large companies, banks, and insurers hold significant stakes in each other, resulting in a tight network of cross-shareholdings and mutual influence.

German Banks Are Able to Control a Significant Number of German