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This examination of the foundations of German and American corporate governance highlights the role of money-centered banks, both as board members in large corporations and as intermediaries on the stock exchange. German banks, by acting as surrogate regulators, became institutional stabilizers, and German regulators encouraged banks to participate in corporate boards in order to overcome agency problems in firms and to control speculation. American investment banks, prior to 1914, often managed to overcome regulatory obstacles, which enabled them to wield more power over corporations than their legendary German counterparts. American banks had more opportunities to intervene in the event of panics, bankruptcies, foreign investment, and corporate consolidation. In contrast to Germany, the United States increasingly imposed regulations that circumscribed the supervisory role of banks as board members.

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American and German accountancy took different paths in the early part of the twentieth century. In Germany, a persistent disconnect arose between relatively sophisticated managerial accounting practices for insiders and the methods used in public financial accounting. The “equity revolution” America experienced—an enormous shift in the number and expectations of shareholders—prompted new demands for financial statements designed to help evaluate the future earning power of companies. In contrast, the effects of World War I retarded equity–market development in Germany. Political frictions reinforced the Germans's; discomfort with equity markets and increased their resistance to revising accounting principles. Banks, tax law, courts, and lawyers, instead of professional accountants, became the primary source of accounting principles. Only in past decades, under pressure from the European Union and global capital markets, have the accounting systems begun to reconverge.