Top

Published in:

2017 | OriginalPaper | Chapter

6. The Neoliberal Financialisation¹

Author : Alessandro Vercelli

Published in: Crisis and Sustainability

Publisher: Palgrave Macmillan UK

Activate our intelligent search to find suitable subject content or patents.

search-config

AI-assisted search

Off

Abstract

This chapter investigates causes and consequences of the second surge of financialisation after the Industrial Revolution. The analysis starts from the main changes in finance theory occurred since the early 1970s that provided the foundations for a new policy strategy in finance of neoliberal inspiration. The implementation of the latter produced far-reaching structural transformations in finance that changed the way in which the economic system, not just the financial system, behaves. The analysis of the genesis and the consequences of shadow banking follow. The focus shifts first to a critical discussion of the reform proposals for the shadow banking system and then for the entire financial system. The concluding remarks discuss causes and implications of the delusion of self-regulation in finance in the neoliberal era.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Adrian, Tobias, Adam B. Ashcraft, Hayley Boesky, and Zoltan Pozsar. 2010. Shadow Banking. In Staff Reports 458. New York: Federal Reserve Bank.

Akerlof, George A. 1970. The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism. Quarterly Journal of Economics 84(3): 488–500.CrossRef

Bernanke, Ben S., and Mark Gertler. 1989. Agency Costs, Net Worth, and Business Fluctuations. The American Economic Review 79(1): 14–31.

Bhagwati, Jagdish. 2004. In Defence of Globalization. New York: Oxford University Press.

BIS. 1999. Implications of Repo Markets for Central Banks. Report of a working group of the Committee on the Global Financial System. Basle: Bank for International Settlements.

Borghesi, Simone, and Alessandro Vercelli. 2008. Global Sustainability. Social and Environmental Conditions. Palgrave Macmillan: Basingstoke and New York.CrossRef

Brown, Ellen. 2013. The Public Bank Solution. Baton Rouge: Third Millennium Press.

Calomiris, Charles W., and R. Glenn Hubbard. 1990. Firm Heterogeneity, Internal Finance, and ‘Credit Rationing’. Economic Journal 100: 90–104.CrossRef

Coase, Ronald H 1960. The Problem of Social Cost. Journal of Law and Economics. 3(3): 1–44.CrossRef

Comotto, Richard. 2010. A White Paper on the Operation of the European Repo Market, the Role of Short-Selling, the Problem of Settlement Failures and the Need for Reform of the Market Infrastructure. Zurich: International Capital Market Association, European Repo Council.

Debreu, Gérard. 1959. The Theory of Value: An Axiomatic Analysis of Economic Equilibrium. New York: John Wiley and Sons.

Diamond, Douglas W. 1984. Financial Intermediation and Delegated Monitoring. Review of Economic Studies 51: 393–414.CrossRef

Fama, Eugene. 1970. Efficient Capital Markets: A Review of Theory and Empirical Work. Journal of Finance 25: 383–417.CrossRef

Fisher, Irving. 1933. The Debt-Deflation Theory of the Great Depression. Econometrica 1: 337–357.CrossRef

Gorton, Gary B. 2009. Information, Liquidity, and the (Ongoing) Panic of 2007. American Economic Review, Papers and Proceedings 99(2): 567–572.CrossRef

Gorton, ———. 2010. Slapped by the Invisible Hand: The Panic of 2007. New York: Oxford University Press.

Gorton, Gary B., and Andrew Metrick. 2010. Regulating the Shadow Banking System. Brookings Papers on Economic Activity 2: 261–297.CrossRef

Griffith-Jones, Stephany, and Avinash Persaud. 2012. Financial Transaction Taxes. Paper Prepared for—and Presented to—the Committee on Economic and Monetary Affairs of the European Parliament in 6th February 2012.

———. 2012. Securitized Banking and the Run on Repo. Journal of Financial Economics 104: 425–451.

IMF. 2009. Lessons of the Financial Crisis for Future Regulation of Financial Institutions and Markets and for Liquidity Management Prepared by the Monetary and Capital Markets Department. http://www.imf.org/external/np/pp/eng/2009/020409.pdf. Retrieved 18 November 2015.

Joint Forum. 2008. Credit Risk Transfer. Developments from 2005 to 2007. April 2008.

Kydland, Finn E., and Edward C. Prescott. 1982. Time to Build and Aggregate Fluctuations. Econometrica 50(6): 1345–1370.CrossRef

Mankiw, Gregory N. 2006. Outsourcing Redux. In Greg Mankiw’s Blog: Random Observations for Students of Economics, May 7. http://gregmankiw.blogspot.co.uk/2006/05/outsourcing-redux.html. Retrieved 2 February 2016.

McCulley, Paul A. 2007. Teton Reflections. PIMCO Global Central Bank Focus. https://www.pimco.com/insights/economic-and-market-commentary/global-central-bank-focus/teton-reflections. Retrieved 2 February 2016.

Minsky, Hyman P. 1982. Can “It” Happen Again? Essays on Instability and Finance. Armonk, NY: Sharpe.

———. 1986. Stabilizing an Unstable Economy. New Haven and London: Yale University Press.

Mishkin, Frederic S. 1991. Asymmetric Information and Financial Crises: A Historical Perspective. In Financial Markets and Financial Crises, ed. R. Glenn Hubbard, 69–108. Chicago: The University of Chicago Press.

———. 2008. Leveraged Losses: Lessons from the Mortgage Meltdown. Speech at the U.S. Monetary Policy Forum, New York, NY, February 29, 2008. https://www.federalreserve.gov/newsevents/speech/mishkin20080229a.htm. Retrieved 7 April 2016.

Muth, John F. 1961. Rational Expectations and the Theory of Price Movements. Econometrica 29(3): 315–335.CrossRef

Nesvetailova, Anastasia. 2014. A Crisis of the Overcrowded Future: Shadow Banking and the Political Economy of Financial Innovation. New Political Economy 20(3): 431–453.CrossRef

Omarova, Saule T 2011. From-Leach-Bliley to Dodd-Frank: The Unfulfilled Promise of Section 23A of the Federal Reserve Act. In North Carolina Law Review 89: 1685–1769.

Orléan, André. 2009. De l’euphorie à la panique: Penser la crise financière. Paris: Édition de la Rue d’Ulm.

———. 2014. The Empire of Value. A New Foundation for Economics. Cambridge, Mass.: MIT Press.

O’Toole, James. 2012. Explaining the Libor interest rate mess. CNNMoneyInvest (July 10, 2012). http://money.cnn.com/2012/07/03/investing/libor-interest-rate-faq/. Retrieved 3 February 2016.

Reinhart, Carmen M., and Kenneth S. Rogoff. 2009. This Time is Different, Eight Centuries of Financial Folly. Princeton and Oxford: Princeton University Press.

Simon, Herbert. 1957. A Behavioral Model of Rational Choice. In Models of Man, Social and Rational: Mathematical Essays on Rational Human Behavior in a Social Setting, ed. Herbert Simon. New York: Wiley.

Snider, Connan A., and Thomas Youle. 2010. Does the LIBOR Reflect Banks’ Borrowing Costs? Available at SSRN: http://ssrn.com/abstract=1569603 or doi: 10.2139/ssrn.1569603. Retrieved 3 March 2016.

SOMO, Centre for Research On Multinational Corporations. 2015. Overview of the Reforms of the Financial System

Stiglitz, Joseph E., and Andrew M. Weiss. 1981. Credit Rationing in Markets with Imperfect Information. American Eonomic Review 71(3): 393–410.

The Institute for Fiscal Studies. 2011. Poverty and Inequality in the UK: 2011. IFS Commentary C118. London: The Institute for Fiscal Studies.

Vercelli, Alessandro. 1991. Methodological Foundations of Macroeconomics. Keynes and Lucas. Cambridge: Cambridge University Press.CrossRef

———. 2011a. A Perspective on Minsky Moments: Revisiting the Core of the Financial Instability Hypothesis. Review of Political Economy 23(1): 49–67.

———. 2013–14. Financialisation in a Long-Run Perspective. International Journal of Political Economy 42 (4):19–46.

Title: The Neoliberal Financialisation1
Author: Alessandro Vercelli
Publisher: Palgrave Macmillan UK
Book: Crisis and Sustainability
Print ISBN: 978-1-137-60068-4

Electronic ISBN: 978-1-137-60069-1

Copyright Year: 2017
DOI: https://doi.org/10.1057/978-1-137-60069-1_6