I'd imagine the answer is 'less than he fears'. Partly because shares in German have never been as important as they are in the US. Stock market capitalisation as a % of gdp was only 27% in 1996 when the US level was around 80%, and even in 2000 it reached only 67.8% when the figure in the US was 154%, the UK 182% and in Switzerland 331%. Thus the 70% fall (if we assume the figures I just quoted were the highs, which is probably good enough) corresponds to fall of about 40% of gdp, whereas the UK market's fall of 50% would be a fall of 90% of Gdp.
Now obviously this is not the end of the story. If the non-quoted Germany industry has seen its value fall similarly then there may be other repercussions, particularly on the banking system which owns a lot of it. However on a purely share market level I think the impact will have been less than in many other countries.
posted by Matthew @ 3/12/2003 03:06:00 PM
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