Latest documents http://publikationen.stub.uni-frankfurt.de/index/index/ Thu, 16 Jun 2011 10:22:34 +0200 Thu, 16 Jun 2011 10:22:34 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/21838 Theodor Baums workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/21838 Thu, 16 Jun 2011 10:22:34 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/7525 The purpose of this essay is to assess the automatic exchange of information as described in EU Directive 2003/48 of 3 June 2003 on taxation of savings income in the form of interest payments with regard to the fundamental right of the individual to a private life, to banking secrecy and the freedoms on which the European internal market is based. The assessment reveals the conflicts of interests and values involved in the holding by banks (particularly those offering private banking services) of increasingly extensive, detailed and intimate information about their clients and in the automatic processing of that information by ever more powerful and sophisticated systems. Banking secrecy plays an essential role in protecting clients against the dangers which the disclosure of such information without their permission might produce. Banking secrecy exists not only in Luxembourg but also in many other European countries, and in Germany and France in particular it is not very different from the system applying in Luxembourg. While the French and German tax authorities do have some investigative powers not enjoyed by their Luxembourg counterparts, those powers are strictly circumscribed and cannot rely on the electronic exchange of information set out in EU Directive 2003/48/EC. While banking secrecy is totally incompatible with the electronic exchange of information, the core question is whether the latter can be reconciled with the respect for private life. In a Europe that sets itself up as the cradle of human rights, the general and en-masse exchange of private information cannot provide adequate and sufficient guarantees that the information exchanged will not be misused. The amount of interference in private life is clearly out of proportion to the public interest involved and is contrary to sub-section 2, article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms and to articles 7 and 8 of the Charter of Fundamental Rights of the European Union. Since the automatic exchange of information at least potentially risks restricting the free flow of capital among Member States and discouraging the use of transborder banking services, its compliance with the fundamental principles of the internal market also needs to be closely examined. The restrictions imposed by such exchange very probably go beyond the limits within which the free movement of capital and services is possible. The European Court of Justice has found that there is no proportionality if the measures supposedly undertaken in the general interest are actually based on a general presumption of tax evasion or tax fraud. However, it would be true to say that the ECJ does not always examine the tax restrictions placed on the free movement of capital particularly thoroughly to ensure that they are necessary or proportionate. The economic effectiveness of the automatic exchange of information is far from being proved and involves significant cost to the banks providing the information and to the tax authorities using it. To date the system does not appear to have produced any significant new tax revenue nor does it prevent the continuing outflow of capital from Europe. Yet withholding at source, which respects individual and economic freedoms, does generate tax revenue that is cost-free to the State. Exchange of information on request in justified cases using the OECD Tax Convention on Income and Capital model does also fight tax fraud while at the same time providing citizens with the guarantees required to ensure their private lives are respected. A combination of these two systems - withholding at source and exchange of information on request in justified cases - would create the proper balance between the public and private interest that the automatic exchange of information cannot provide. Theodor Baums; Thierry Bonneau; André Prüm workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/7525 Fri, 26 Feb 2010 09:30:36 +0100 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/6419 Theodor Baums workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/6419 Thu, 30 Apr 2009 14:23:01 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/145 On 27 and 28 September 2007, a commission formed on the initiative of the authors held its first meeting in Aarhus, Denmark to deliberate on its goal of drafting a "European Model Company Law Act" (EMCLA). This project, outlined in the following pages, aims neither to force a mandatory harmonization of national company law nor to create a further, European corporate form. The goal is rather to draft model rules for a corporation that national legislatures would be free to adopt in whole or in part. Thus, the project is thought as an alternative and supplement to the existing EU instruments for the convergence of company law. The present EU instruments, their prerequisites and limits will be discussed in more detail in Part II, below. Part III will examine the US experience with such "model acts" in the area of company law. Part IV will then conclude by discussing several topics concerning the content of an EMCLA, introducing the members of the EMCLA Working Group, and explaining the Group's preliminary working plan. Theodor Baums; Paul Krüger Andersen workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/145 Thu, 27 Mar 2008 11:22:01 +0100 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/859 Theodor Baums workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/859 Fri, 06 Jul 2007 08:54:34 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/1105 This paper will sketch out some of the developments in European company law as seen from the current moment, which might be referred to as post- 2003 Action Plan, and from my purely personal viewpoint. I will thus restrict myself to presenting the current and expected legislative projects of the EU, with particular focus on the plans and activities of the Commission, and for the moment bracket out both a number of important and interesting decisions of the European Court of Justice and the debates among European legal scholars. Theodor Baums workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/1105 Mon, 30 Apr 2007 10:48:15 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4634 The attitude expressed by Carl Fuerstenberg, a leading German banker of his time, succinctly embodies one of the principal issues facing the large enterprise – the divergence of interest between the management of the firm and outside equity shareholders. Why do, or should, investors put some of their savings in the hands of others, to expend as they see fit, with no commitment to repayment or a return? The answers are far from simple, and involve a complex interaction among a number of legal rules, economic institutions and market forces. Yet crafting a viable response is essential to the functioning of a modern economy based upon technology with scale economies whose attainment is dependent on the creation of large firms. Theodor Baums; Kenneth E. Scott workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4634 Fri, 29 Apr 2005 13:00:20 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4905 The paper undertakes a comparative study of the set of laws affecting corporate governance in the United States and Germany, and an evaluation of their design if one assumes that their objective were the protection of the interests of minority outside shareholders. The rationale for such an objective is reviewed, in terms of agency cost theory, and then the institutions that serve to bound agency costs are examined and critiqued. In particular, there is discussion of the applicable legal rules in each country, the role of the board of directors, the functioning of the market for corporate control, and (briefly) the use of incentive compensation. The paper concludes with the authors views on what taking shareholder protection seriously, in each country s legal system, would require. Theodor Baums; Kenneth E. Scott workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4905 Mon, 11 Apr 2005 11:24:50 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4748 The issues that are discussed in the following derive from consultations with Member states of the OECD during the June 2000 preparatory meeting. Paper, prepared for the OECD Conference "Company Law Reform in OECD Countries: A Comparative Outlook on Current Trends Stockholm", Dec. 7-8, 2000. Theodor Baums workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4748 Mon, 11 Apr 2005 11:23:08 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4744 This article presents a structural overview of corporate disclosure in Germany against the background of a rapidly evolving European market. Professor Baums first makes the theoretical case for mandatory disclosure and outlines the standard, regulatory elements of market transparency. He then turns to German law and illustrates both how it attempts to meet the principle, theoretical demands of disclosure and how it should be improved. The article also presents in some detail the actual channels of corporate disclosure used in Germany and the manner in which German law now fits into the overall development of the broader, European Community scheme, as well as the contemplated changes and improvements both at the national and the supranational level. Theodor Baums workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4744 Mon, 11 Apr 2005 11:23:07 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4746 The paper was submitted to the conference on company law reform at the University of Cambridge, July 4th, 2002. Since the introduction of corporation laws in the individual German states during the first half of the 19th Century, Germany has repeatedly amended and reformed its company law. Such reforms and amendments were prompted in part by stock exchange fraud and the collapse of large corporations, but also by a routine adjustment of law to changing commercial and societal conditions. During the last ten years, a series of significant changes to German company law led one commentator to speak from a "company law in permanent reform." Two years ago, the German Federal Chancellor established a Regierungskommission Corporate Governance ("Government Commission on Corporate Governance") and instructed it to examine the German Corporate Governance system and German company law as a whole, and formulate recommendations for reform. Theodor Baums article http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4746 Mon, 11 Apr 2005 11:23:05 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4711 Shareholder voting is back on the agenda of public debate for several reasons. One is the investors’ internationalization of capital investments and the raising of funds globally by companies. It can be predicted that considering the growing together of capital markets the trend to international investments will increase not least because the introduction of the Euro will create a uniform European stock market. This leads to the question how the law deals with this development and its problems. The EU Commission has commissioned a comparative study dealing, inter alia, with shareholders’ representation at general meetings in the EU member states.1 The aim is to simplify the operating regulations for public limited companies in the EU. Furthermore, the internationalization of shareholdings leads the investors to ask how their interests are protected abroad. Are the mechanisms of shareholder protection sufficient for foreign investors? In particular the formation of transnational companies like Daimler-Chrysler will change corporate governance systems. It remains to be seen whether and how foreign institutional investors will use measures of - in this case - German corporate law to control the management. From a microeconomic point of view the question is what specific features of a given corporate governance system might contribute to better performance of firms. The following remarks will however, be confined to one specific aspect of corporate governance only, the exercise of shareholders’ voting rights at the general meeting. Theodor Baums; Rainer Schmitz workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4711 Mon, 11 Apr 2005 11:22:41 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4716 Theodor Baums workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4716 Mon, 11 Apr 2005 11:22:32 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4708 The article describes the legal structure of the Daimler-Chrysler merger. It asks why this specific structure rather than another cheaper way was chosen. This leads to the more general question of the pros and cons of mandatory corporate law as a regulatory device. The article advocates an "optional" approach: The legislator should offer various menus or sets of binding rules among which the parties may choose. (JEL: ...) Theodor Baums workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4708 Mon, 11 Apr 2005 11:22:30 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4690 Paper, presented at the Conference on Comparative Corporate Governance Max-Planck-Institut für Ausländisches und Internationales Privatrecht Hamburg, May 15-17, 1997 Theodor Baums article http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4690 Mon, 11 Apr 2005 11:22:17 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4686 Paper presented at the conference on "Employees and Corporate Governance", Columbia University Law School, New York, November 22, 1996 Theodor Baums; Bernd Frick article http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4686 Mon, 11 Apr 2005 11:22:07 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4684 The previous proposal for a company law directive on takeovers in 1990 was rejected in Germany almost unanimously for several different reasons. The new "slimmed down" draft proposal, in the light of the subsidiarity principle, takes the different approaches to investorprotection in the various member states better into account. Notably, the most controversial principle of the previous draft, viz. the mandatory bid rule as the only means of investorprotection in case of a change of control, has been given up. Therefore a much higher degree of acceptance seems likely. The Bundesrat (upper house) and the industry associations have already expressed their consent; the Bundestag (Federal Parliament) will deal with the proposal shortly. The technique of a "frame directive" leaves ample leeway for the member states. That will shift the discussion back to the national level and there will lead to the question as to how to make use of this leeway (cf. II, III, below) rather than to a debate about principles as in the past. It seems likely that criticism will confine itself to more technical questions (cf. IV, below). Theodor Baums workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4684 Mon, 11 Apr 2005 11:22:03 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4679 The corporate governance systems in Europe differ markedly. Economists tend to use stylized models and distinguish between the Anglo-American, the German and the Latinist model.1 In this view, for instance, the Austrian, Dutch, German, and Swiss systems are said to be variations of one model. For lawyers the picture is of course, much more detailed as particular rules may vary even where common principles prevail. Many comparative studies on these differences have been undertaken meanwhile.2 I do not want to add another study but to treat a different question. Are there as a consequence of growing internationalization, globalization of markets and technological change, also tendencies of convergence of our corporate governance systems? My answer will be in two parts. As corporate governance systems are traditionally mainly shaped by legislation, the first part will analyze the influence of the economic and technological change on the rule-setting process itself. How does this process react to the fundamental environmental change? That includes a short analysis of the solution of centralized harmonizing of company law within the EU as well as the question of whether EU-wide competition between national corporate law legislators can be observed or be expected in the future. The second part will then turn to the national level. It deals with actual tendencies of convergence or, more correctly, of approach by the German corporate governance system to the Anglo-American one. Theodor Baums workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4679 Mon, 11 Apr 2005 11:22:01 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4681 Theodor Baums workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4681 Mon, 11 Apr 2005 11:22:00 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4673 Universal banking means that banks are permitted to offer all of the various kinds of financial services. This includes classical banking activities like the credit and deposit business, as well as investment services, placement and brokerage of securities, and even insurance activities, trading in real estate and others. German universal banks also hold stock in nonfinancial firms and offer to vote their clients' shares in other firms. This paper deals with universal banks and their role in the investment business, more specifically, their links with investment companies and their various roles as shareholders and providers of financial services to such companies. Banks and investment companies have, as financial intermediaries, one trait in common: they both transform capital of investors (depositors and shareholders of investment funds, respectively) into funds (loans and equity or debt securities, respectively) that are channeled to other firms. So why should a regulation forbid to combine these transformation tasks in one institution or group, and why should the law not allow banks to establish investment companies and provide all kinds of financial services to them in addition to their banking services? German banking and investment company law have answered these questions in the affirmative. This paper argues that the existing regulation is not a sound and recommendable one. The paper is organized as follows: Sections II - V identify four areas where the combination of banking and investment might either harm the shareholders of the investment funds and/or negatively affect other constituencies such as the shareholders of the banking institution. These sections will at the same time explore whether there are institutional or regulatory provisions in place or market forces at work that adequately protect investors and the other constituencies in question. Concluding remarks follow (VI.). Theodor Baums workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4673 Mon, 11 Apr 2005 11:21:52 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4662 Until the late 1980s, asset securitisation was an US-American finance technique. Meanwhile this technique has been used also in some European countries, although to a much lesser extent. While some of them have adopted or developed their legal and regulatory framework, others remain on earlier stages. That may be because of the lack of economic incentives, but also because of remaining regulatory or legal impediments. The following overview deals with the legal and regulatory environment in five selected European countries. It is structured as follows: First, this finance technique will be described in outline to the benefit of the reader who might not be familiar with it. A further part will report the recent development and the underlying economic reasons that drive this development. The main part will then deal with international aspects and give an overview of some legal and regulatory issues in five European legislations. Tax and accounting questions are, however, excluded. Concluding remarks follow. Theodor Baums workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4662 Mon, 11 Apr 2005 11:21:44 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4663 The following descriptive overview of the German corporate governance system and the current debate is structured as follows. Part II will give some information on the empirical background. Part III will describe the formal legal setting as well as actual practices in some key areas. Part IV will then deal with some issues of the current debate. Theodor Baums workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4663 Mon, 11 Apr 2005 11:21:43 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4656 In my following remarks I will focus on a differente which we find in German law as well as in other legislations, the differente b e t w e e n entrepreneurial investments among firms and merely financial investments. Whereas OUT law of groups of companies o f Konzernrecht contains quite an elaborated set of rules, the rules governing financial investments, especially Cross-border financial investments, seems to be somewhat underdeveloped. Theodor Baums workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4656 Mon, 11 Apr 2005 11:21:39 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4650 In early 1991 the United States Treasury Department of the Bush Administration recommended in ib proposal for Modemizing The FinancialSystem l that, in addition to other remarkable breaks with the traditional United States financial Services framework, the current bank holding Company structure be replaced with a new financial Services holding Company that would reward banks with the ability to engage in a broad new range of financial activities through separate afbliates, including full-service securities, insurance, and mutual fund activities. The Treaaury Department pointed out that commercial banking and investment banking are complementary Services and that the Glass-Steagall Separation was unnecessary. The Treasury Department gave many reasons for the need for financial modernization and why such a modemized System would work better. As an example that demonstrates the advantages of the System proposed by the Treasury Department, the proposal pointed to the German banks and called the German model of a universal banking System the most liberal banking System in the world. -What makes the German universal banking System so unique and desirable? The following outline of the history and the current structure of the Getman banking System is intended to give readers a background tc determine whether the German banking System could be a model for the System of the future. Theodor Baums; Michael Gruson workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4650 Mon, 11 Apr 2005 11:21:35 +0200 http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4651 Theodor Baums workingpaper http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/4651 Mon, 11 Apr 2005 11:21:34 +0200