Comparative Financial Systems Assignment 1

Jon Lakidain (ID: 854235)

THE FINANCIAL SYSTEMS OF GERMANY AND SPAIN

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Table of Contents

Comparative Financial Systems Assignment 1

Jon Lakidain (ID: 854235)

Executive Summary .......................................................................................................... 3 Purpose of analysis ................................................................................................................... 3 Introduction ................................................................................................................................. 3 Reasons of selection of countries ......................................................................................... 3 Documentation .................................................................................................................. 4 Economy Size ............................................................................................................................... 4 Unemployment ........................................................................................................................... 5 Debt ................................................................................................................................................ 6 Interest Rates .............................................................................................................................. 6 Net Exports ................................................................................................................................... 7 Conclusion ........................................................................................................................... 7 Bibliography ....................................................................................................................... 8

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Comparative Financial Systems Assignment 1

Jon Lakidain (ID: 854235)

Executive Summary Purpose of analysis

The main goal of the following essay is to compare and analyse the financial systems of two countries like Germany and Spain through several frameworks.

Introduction

Both countries are members of the European Union and the Eurozone (they have the same currency, the Euro). Because of this, the European Central Bank administrates the monetary policy of Germany and Spain, which has the main goal of maintaining the stability of prices low on the Eurozone. In other words, the ECB is in charge of keeping the inflation rates at a low level. Each of the countries still keeps their own national central bank, but they are very limited in their monetary policies and most of their decisions have to be approved by the ECB.

Reasons of selection of countries

The reason to compare these two countries is to highlight the differences between them when actually the same institutions regulate both. In addition, it is interesting to compare the biggest economy in Europe (Germany) and the biggest economy of the so-called South
European countries (Spain), because of all the actual controversy and continuous news going on in Europe.

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Comparative Financial Systems Assignment 1

Jon Lakidain (ID: 854235)

Documentation Economy Size

First of all, compare the size of both economies through their Gross Domestic Product (GDP) on a the 2005-2013 time period:

We can clearly observe that the German economy is on average 2.5 times bigger than the
Spanish economy. In