Reference : Banks and the False Dichotomy in the Comparative Political Economy of Finance
Scientific journals : Article
Law, criminology & political science : Political science, public administration & international relations
http://hdl.handle.net/10993/14592
Banks and the False Dichotomy in the Comparative Political Economy of Finance
English
Howarth, David[University of Luxembourg > Faculty of Language and Literature, Humanities, Arts and Education (FLSHASE) > Identités, Politiques, Sociétés, Espaces (IPSE) >]
[en] Banking ; International Financial Crisis ; Varieties of Capitalism ; Political Economy ; Securitization
[en] The wide-ranging Varieties of Capitalism literature rests on a particular conception of banks and banking, which, we argue, no longer reflects the reality of modern financial systems. We take advantage of the greater information regarding bank activities revealed by the financial crisis to consider the reality, across eight of the world’s largest developed economies, of the ‘financial power’ of banks to act as bulwarks against market forces. This article offers a ‘market-based banking’ framework that transcends the bank-based/capital market-based dichotomy that dominates Comparative Political Economy’s (CPE’s) consideration of financial systems, and argues for a future CPE research focus on the activities of banks. By demonstrating how market-based banking increases market influences on the supply of credit, we highlight an under-appreciated source of financial market pressure on non-financial companies (NFCs) that has potential impact across the range of issues that the Varieties of Capitalism (VoC) literature has seen as differentiating national systems, with implications in areas such as labor, welfare, innovation and flexibility.
[University of Luxembourg > Faculty of Language and Literature, Humanities, Arts and Education (FLSHASE) > Identités, Politiques, Sociétés, Espaces (IPSE) >]
