For example, the sharp growth in the supply of venture capital in the United States suggests that the momentum of the real economy is being underpinned by flexible, innovative forms of financing in the capital market. The German financial system has been traditionally characterised by the dominant role of the banks. Such more “bank-based” structures should by no means be equated with backwardness, however.
On the contrary, the credit institutions’ intermediation can in some cases even be superior to the market-based financial system. Just to give a particularly important example: The corporate landscape in Germany has traditionally been characterised by small- and medium-sized enterprises.