Ascent of Money by Niall Ferguson



Ascent of Money by Niall Ferguson

Introduction

The main purpose of this paper is to make an analysis on the chapter analysis of Ferguson. This report discusses the chapter 1 which is about Money and Banking in Europe.

Chapter 1: Money and Banking in Europe

In this chapter, Ferguson has discussed the money and banking systems in Europe. In this chapter, Ferguson discusses that the major central banks of the European Union are the Bank of France, the German Bundesbank and the Bank of Italy. Among the major commercial banks include the German Deutsche Bank AG, Dresdner Bank AG and Commerzbank AG, and in France the nationalized Banque Nationale de Paris, Credit Lyonnais and Societe Generale. There are major structural differences that distinguish the European banking system from that of other industrialized countries (Sam, 2008). The principal must be the type of property, the depth of the financial system and industry concentration.

One of the distinctive features of European banking system, especially in Latin countries, is due to the role played by the state. All banking institutions in the U.S., Canada and England are in private hands. However, in France and Italy the government owns major banks, or the majority of shares. The role of governments in the banking system is thus very important and often controversial. French bank Crédit Lyonnais suffered much criticism in the early 1990's because the government covered its huge losses. European banks may carry out prohibited activities elsewhere, such as holding shares in other companies. Commercial banks in Europe tend to direct their activities, particularly to business and often limit their long-term loans, usually providing short term loans. The long-term loans often grant them subsidiaries of banks (Ferguson, 2008). The proportion of deposits that control major European commercial banks is very high. This is ...