This book provides a critical analysis of widespread claims about the merits of the "bank-based" German system of investment finance. The purpose of the book is to provide an analytical foundation for these claims, and to confront them with empirical evidence from the German economy in the postwar period. The authors show that these claims are not supported by the evidence. This is an important finding, as it reveals that there is no basis for the view that the German system of investment finance is one that should be emulated by other countries.