At times during the 1970s and 1980s, when the so-called anglo-saxon model of relatively unbridled financial markets was not delivering particularly good results in terms of economic growth, there was some envy of what one might depict as the institutional model of corporate ownership, as evident in Germany and Japan for example. In this model much of the equity of major businesses is closely held by friendly groups of long-term investors including one’s bankers and associate companies. It has been argued that this arrangement provides the best environment for long-term growth and stability, in contrast to the situation where businesses are exposed fully to the cut and thrust of the stock markets, which are characterised as being populated by people seeking only short-term profit and ever alert to opportunities for takeovers, asset stripping and the like. But experience of the 1990s does not support that view. Germany and Japan have been the laggards of the decade. The true cost to Japan of the longstanding cosy relationships between banks, industrial corporations and government ministries has become apparent. And we watch in some amazement the reaction among some sections 1  BIS Review 135/1999  of the political and business communities in Germany to the Vodafone/Mannesmann takeover battle an almost unprecedented (for Germany) hostile bid, no more palatable for being from abroad - along with the government’s efforts to save the Holzmann construction group, not to mention the authorities’ stout defence of the largely state-owned domestic regional banking network there.
Mr Latter gives a tour d’horizon of the current situation on the world financial markets  Text of the opening address by Tony Latter, a Deputy Chief Executive of the Hong Kong Monetary Authority, to the Asia Pacific Issuers and Investors Forum, in Hong Kong on 7 December 1999. *  *  *  As we leave the twentieth century behind, the major regions of the world economy appear to be in quite good shape. North America is buoyant; Europe is positioned for more solid growth than of late, albeit only by its own rather modest standards; Japan may be moving forward, even if we have seen too many false dawns to be entirely confident; and the rest of Asia has recovered from the 1997 setback more strongly and quickly than most people expected. Meanwhile, major stock markets look set to end the millennium at or near all-time highs, with the notable exception of Japan, where the Nikkei is still at only about half its peak of more than ten years ago. It is also a confident end to the decade, century and millennium for “markets” in a broader sense. The 20th century has witnessed a considerable ebb and flow of fashions in economics, between allegiances to systems which afford primacy to market forces and those which yield varying degrees of control to the state. As it turns out, the former have held sway.