View from City Road: Deregulation - but not yet

The modest endorsement of Britain's experience in deregulation from Germany's economics minister will no doubt come as a welcome fillip to the Government. Gunther Rexrodt's remarks, though, do not herald a wholesale change in Bonn's policy.

The German government has paid lip-service to the need for deregulation, privatisation and reduced subsidies for some time: the centrist Free Democrats have a particular fondness for free market cures. But delivery has so far been painfully slow, even in areas like telecoms that are crying out for it.

The Germans are also far more reluctant, quite rightly, to liberalise their financial system. For reasons of monetary control, the Bundesbank rather likes the staid reputation of the German banks.

And the shareholder and lending links between the big banks and industry, which have stood the German economy in good stead by encouraging long-term thinking and investment, would also mean less if big German corporations were to become as promiscuous in their banking relationships as many big US or UK companies.