Consumers and debt in the Federal Republic of Germany

The author reports on an action taken by German consumer advice centres on behalf of consumer-debtors against specialized credit banks (Teilzahlungsbanken). The report refers to contracts concluded in the period of 1975 to 1980. By aggressive marketing mostly among marginal consumers, banks were able to charge consumers excessive interest rates and impose unfair contract conditions. Due to loss of job or personal misfortune many consumers have been unable to pay the instalments and have been subject to an assortment of harsh debt collection methods. The Supreme German Civil Court stepped in by annulling a number of credit contracts considered as being extortionate. Advice centres figured out that a great number of credit contracts could be regarded as void when applying the criteria of the Court. Banks have tried to evade the court rulings. Therefore the advice centres set up a network of action to help the consumer-debtor by negotiating his case with the bank, by making settlements, by using media, and by bringing legal actions. It is hoped that a collective settlement scheme can be worked out one day.

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Verbraucherverschuldung in der Bundesrepublik Deutschland

Zusammenfassung Der Beitrag berichtet von den sog. Kreditaktionen der Verbraucherzentralen zugunsten von Konsumenten, die bei Teilzahlungsbanken Kredite zu überhöhten und z.T. sittenwidrigen Bedingung en aufgenommen hatten. Wegen Arbeitslosigkeit oder Umständen im persönlichen Bereich war es vielen Verbrauchern nicht möglich, die fälligen Kreditraten aus ihrem (reduzierten) Einkommen zurückzuzahlen. Eine wesentliche Hilfe für diese unverschuldet in Not gekommenen Verbrauchergruppen bildete die Rechtsprechung des Bundesgerichtshofes, die eine Reihe der in der Niedrigzinsphase von 1975–80 geschlossenen Verträge wegen Zinsüberhöhung und sonstiger belastender Bedingungen für sittenwidrig und damit nichtig erklärte. Nach Erhebungen war anzunehmen, daß eine große Zahl von Kreditverträgen gem, den Kriterien des BGH unwirksam war, ohne daß die Verbraucher das wußten oder rechtlichen Schutz bemühten. Die Banken hatten von sich aus keinen Anlaß, den Verbrauchern entgegenzukommen. Deshalb begannen die Verbraucherzentralen, insbes. in Hamburg, Bremen und Nordrhein-Westfalen, sog. Kreditaktionen, in denen die Verbraucher aufgefordert wurden, ihre Verträge überprüfen zu lassen. Die Verbraucherzentralen bemühten sich bei festgestellter Zinsüberhöhung in Verhandlungen mit der Bank, und durch Öffentlichkeitsarbeit eine für den Verbraucher günstige Regelung zu erreichen. Angestrebt wird eine globale Vereinbarung zur Regelung des Problemkreises.

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Annette Kähler is a lawyer and consultant to the Verbraucherzentrale Nordrhein-Westfalen, Mintropstraße 27, D-4000 Düsseldorf 1, FRG.     

A market without the 'right' property rights

While Vietnam's reforms provided some of the weakest legal private property rights amongst the transitions countries, cities like Ho Chi Minh City have booming domestic real estate markets. Interestingly, while most properties in 2001 did not have legal title, those on the market did advertise a variety of property rights claims. Employing a hedonic price model to analyse the pattern of prices at which sellers offer properties in Ho Chi Minh City, this study examines how this market values property rights. The findings show that multiple forms of property rights, enforced by highly decentralized state institutions, are operational in this market. Furthermore, legal title itself is not the most valuable form of property right. These findings suggest that the value of property rights emanates from where it is enforced within the particular institutional context of a market.     

International diversification: An extreme value approach

International diversification has costs and benefits, depending on the degree of asset dependence. We study international diversification with two dependence measures: correlations and extreme dependence. We discover that dependence has typically increased over time, and document mixed evidence on heavy tails in individual countries. Moreover, we uncover three additional findings related to dependence. First, the timing of downside risk differs depending on the region. Surprisingly, recent Latin American returns exhibit little downside risk. Second, Latin America exhibits a great deal of correlation complexity. Third, according to the empirical results, correlation does not vary with returns, but extreme dependence does vary monotonically with regional returns. Our results are consistent with a tradeoff between international diversification and systemic risk. They also suggest international limits to diversification, and that international investors demand some compensation for joint downside risk during extreme events.     

Euphemisms and hypocrisy in corporate philanthropy

Over the past two decades, a growing number of large multinational corporations have come to view philanthropy as an important part of their business operations. This has stimulated research on the many different strategies that are pursued by these corporations in their attempts to become more philanthropic while remaining economically responsible. In this situation, some researchers have argued, corporations run the risk of being caught out as hypocrites. Through an analysis of the corporate social responsibility reports of the biggest multinational corporations, this article shows how the risk of hypocrisy is managed communicatively through the use of euphemisms. The article argues that the use of euphemisms makes it possible to communicate both economically and philanthropically without manifest contradictions. Euphemisms, however, are also risky in their own right.     

National Innovation Systems, ‘Real Economies’ and Instituted Processes

The design of institutions, policies and units of analysis are all predicated upon the ways in which we see the world and explain change. Today, as the pace of change quickens due to technological advancement and growing technoeconomic interdependencies in a series of processes generally referred to as globalization, analytic frameworks which emphasize national systems have emerged to provide a unit of analysis through which to explain these changes and growing interactions. These frameworks have the allure of trying to incorporate the ways in which economies, markets and economic agents actually behave – with particular reference to innovation, knowledge, learning and institutions. Our purpose in this paper is to raise some questions about the importance of these frameworks from a policy (managerial) and analytic perspective, to outline some limitations of their utility, and to suggest some useful paths for investigation.