Suchergebnisse

Preface / James K. Galbraith -- Introduction: financial development : the sword of damocles hanging over the process of economic development / Faruk Ülgen -- Financial liberalization, crises and policy implications / Philip Arestis -- Global financing: a bad medicine for developing countries / Joaquín Arriola -- Financial development, instability and some confused equations / Faruk Ülgen -- Underdeveloped financial markets infrastructure of emerging market economies : assessment of underlying challenges and suggested policy responses / Shazia GHANI -- Towards de-financialization / Malcolm Sawyer -- A common currency for the common good / Sergio Rossi -- A capital market without banks : lending and borrowing in Hennaarderadeel, Friesland, 1537-1555 / Merijn KNIBBE And Paul Borghaerts -- Financial liberalization, financial development and instability in emerging economies : what lessons for the franc zone? / Aboubakar Sidiki Cisse -- Depositor myopia and banking sector behavior / Ozan Bakis, Fatih Karanfil And Sezgin Polat -- Dollarization and financial development : the experience of LA countries / Eugenia Correa And Alicia Girón -- Financialization in Brazil : a paper tiger, with atomic teeth? / Pierre Salama -- National and supra-national financial regulatory architecture : transformations of the Russian financial system in the post-soviet period / Nadezhda N. Pokrovskaia -- Minsky in Beijing : shadow banking, credit expansion and debt accumulation in china / Yan Liang

AbstractThe economy‐wide liberalization reforms implemented from the 1980s onwards in major capitalist economies had deep impact on financial markets. Public financial regulation has been replaced by self‐regulation, financial innovations proliferated and gave rise to many diversified and complex speculative operations that financialized most economic decisions and actions. Recurrent instabilities and crises became common ground in advanced as well as in emerging market economies and converged on the global systemic crisis in 2007–08, notwithstanding the efficient market doctrine that kept supporting financial liberalization. This crisis raised concerns about the relevance of market‐based financial regulation with regard to the systemic viability of capitalist economies and brought forward the central role of financial regulatory framework in the sustainable working of open societies. This article considers financial stability as a collective action problem through the lens of the literature on the commons and public goods. It seeks to contribute to the development of a relevant paradigm of collective action in the provision of a particular public good, financial stability, through a particular public action, financial regulation. After recalling the broad outlines of the evolution of financial markets and the institutional environment in the last decades, the monetary and financial characteristics of a capitalist economy are presented. The monetary and financial structure turns out to be a public infrastructure. The criticalness of financial transactions for the whole economic society together with the non‐rivalrousness and non‐excludability of financial stability determine the very publicness of the latter. The continuity of financial relations fundamentally needs a viable financial system. However, this is a complex issue as it falls into the classical opposition "private vs public" and calls for a collective action framework consistent with the characteristics of a financialized economy. This article argues that financial stability cannot be ensured through individual‐decision‐based market relations because of the endogenous limits of individual actions and the systemic nature of instabilities they can provoke. A specific treatment of finance as a public utility and of financial stability as a public good is then required. The study on the organization and management of financial markets, namely financial governance issue, ultimately leads to consider financial regulation as a collective action problem that calls for a public supervision framework through an extra‐market macroregulation, apt to allow economy to work in a viable way.

International audience ; This study proposes an institutionalist analysis of financialization through the lens of Veblen, built on some peculiar characteristics of money and related financial relations in a market-based capitalist economy. Following the case of the overcapitalization of farmlands, studied by Veblen in The Vested Interests, the analysis argues that modern capitalism is a financialized society dominated by vested interests that rely on financial liberalization-led speculative overcapitalization that often leads to a perverse accumulation process and results in systemic catastrophes. Consequently, one of the major constituent institutions of liberal finance, market-dependent self-regulation, reveals to be unable to deal with society-level issues such as financial stability. This latter must be handled at a systemic level as a public good. Therefore specific public regulation and action mechanisms must be designed to maintain society (and dominant vested-interests) within some viability limits to ensure a smooth functioning of the economy.

International audience ; This study proposes an institutionalist analysis of financialization through the lens of Veblen, built on some peculiar characteristics of money and related financial relations in a market-based capitalist economy. Following the case of the overcapitalization of farmlands, studied by Veblen in The Vested Interests, the analysis argues that modern capitalism is a financialized society dominated by vested interests that rely on financial liberalization-led speculative overcapitalization that often leads to a perverse accumulation process and results in systemic catastrophes. Consequently, one of the major constituent institutions of liberal finance, market-dependent self-regulation, reveals to be unable to deal with society-level issues such as financial stability. This latter must be handled at a systemic level as a public good. Therefore specific public regulation and action mechanisms must be designed to maintain society (and dominant vested-interests) within some viability limits to ensure a smooth functioning of the economy.

This article suggests an institutionalist analysis of monetary capitalism and points to the inconsistency of liberal regulation mechanisms. It leans on the characteristics of money in a capitalist economy, often ignored by the consensual wisdom but explicitly studied by institutionalist approaches as major concerns in economic evolution. The article then shows, in a Minskyian vein, the weaknesses and irrelevance of liberal financial structures with regard to the prerequisites of sustainable macroeconomic stability. The main implication is that macro-prudential regulatory reforms must be designed and implemented to tame speculative finance. Therefore, market-based self-regulation mechanisms must be replaced by public regulation processes that could be framed on two rules: preventive-constrained finance and preventive-binding funding.

This article suggests an institutionalist analysis of monetary capitalism and points to the inconsistency of liberal regulation mechanisms. It leans on the characteristics of money in a capitalist economy, often ignored by the consensual wisdom but explicitly studied by institutionalist approaches as major concerns in economic evolution. The article then shows, in a Minskyian vein, the weaknesses and irrelevance of liberal financial structures with regard to the prerequisites of sustainable macroeconomic stability. The main implication is that macro-prudential regulatory reforms must be designed and implemented to tame speculative finance. Therefore, market-based self-regulation mechanisms must be replaced by public regulation processes that could be framed on two rules: preventive-constrained finance and preventive-binding funding.

Abstract:Although in the Schumpeterian process of entrepreneurial innovations money and financial markets are assumed to affect economic development, Schumpeter does not explicitly study financial evolution and its effects on real dynamics. In order to fill this gap, this article suggests a Minsky-inspired interpretation of Schumpeterian institutional dynamics in monetary terms. It then develops a specific Schumpeterian analysis of the evolution of financial institutions and regulatory mechanisms in the wake of the 2007–08 crisis and points to major consequences of financial innovations on economic stability. It appears that unlike the creative destruction process of entrepreneurial innovations, in a liberalised/deregulated environment financial innovations move banks from their crucial role of financing long-term economic evolution and lead to reckless finance. Thus, financial market dynamics put economies on a destructive path. Such an evolution calls for active and tight rational regulation in order to shape capitalist finance towards more stable and welfare-enhancing strategies.

This article maintains that capitalist market economies have a threefold composite characteristic (the central role of money and financial relations, the crucial role of institutional patterns, and the macro nature of stability and viability concerns) that makes social control a consistent way of designing an efficient macro environment. Institutional economics precisely relies on such a triptych and reveals to be an appropriate theoretical and practical reference to deal with today's major economic issues such as the 2007-08 systemic crisis. Therefore the article suggests an institutional analysis that points to the role of institutional-regulatory framework and the rationale of social control principles in the stabilization of the working of capitalist finance. It then advocates for an alternative organization of the banking and financial system in order to ensure systemic sustainability and to guide the economy towards socially efficient directions.

This article maintains that capitalist market economies have a threefold composite characteristic (the central role of money and financial relations, the crucial role of institutional patterns, and the macro nature of stability and viability concerns) that makes social control a consistent way of designing an efficient macro environment. Institutional economics precisely relies on such a triptych and reveals to be an appropriate theoretical and practical reference to deal with today's major economic issues such as the 2007-08 systemic crisis. Therefore the article suggests an institutional analysis that points to the role of institutional-regulatory framework and the rationale of social control principles in the stabilization of the working of capitalist finance. It then advocates for an alternative organization of the banking and financial system in order to ensure systemic sustainability and to guide the economy towards socially efficient directions.