94 research outputs found
"Three Futures for Postcrisis Banking in the Americas: The Financial Trilemma and the Wall Street Complex"
This would seem an opportune moment to reshape banking systems in the Americas. But any effort to rethink and improve banking must acknowledge three major barriers. The first is a crisis of vision: there has been too little consideration of what kind of banking system would work best for national economies in the Americas. The other two constraints are structural. Banking systems in Mexico and the rest of Latin America face a financial regulation trilemma, the logic and implications of which are similar to those of smaller nations’ macroeconomic policy trilemma. The ability of these nations to impose rules that would pull banking systems in the direction of being more socially productive and economically functional is constrained both by regional economic compacts (in the case of Mexico, NAFTA) and by having a large share of the domestic banking market operated by multinational banks. For the United States, the structural problem involves the huge divide between Wall Street megabanks and the remainder of the U.S. banking system. The ambitions, modes of operation, and economic effects of these two different elements of U.S. banking are quite different. The success, if not survival, of one element depends on the creation of a regulatory atmosphere and set of enabling federal government subsidies or supports that is inconsistent with the success, or survival, of the other element.Banking; Financial Crisis; Trilemma; Wall Street; Mexico; United States; Financial Regulation; Megabanks; Regional Compacts; NAFTA
Limits of Policy Intervention in a World of Neoliberal Mechanism Designs: Paradoxes of the Global Crisis
The current global context poses several paradoxes: the recovery from the 2009 recession was not a recovery; investment, normally driven by profit rates, is lagging and not leading economic activity; the crisis is global but debate involves sub-global levels; and public safety-nets, which have helped to stabilize national income, are being cut. These paradoxes can be traced, in part, to the impact of the “truce” that followed the Keynesian-Monetarist controversy on economists’ ideas about policy activism. This implicit “truce” has removed activist macro policy from discussion, and shifted attention toward institutions as mechanisms for solving game-theoretic coordination problems. Policy activism then centers on how the “agents” (nations) can achieve optimal use of their available resources (or optimal access to resources) at the global level; and this involves creating and fine-tuning compacts – neoliberal mechanism designs – that can capture rents and attract globally mobile capital. This approach leads economists to see the key problem in the current global crisis as fixing broken neoliberal mechanisms. However, a global economy dominated by mechanisms that feed on aggregate demand without generating it faces the prospect of stagnation or collapse.Neoliberal mechanism design, Policy activism, Keynesian- Monetarist controversy, Globalization, Capital mobility, Hyman Minsky, Bradford De Long
Can the Global Neoliberal Regime Survive Victory in Asia? The Political Economy of the Asian Crisis
BANKING STRATEGY AND FINANCIAL EXCLUSION: TRACING THE PATHWAYS OF GLOBALIZATION
This paper argues that the current world-wide scenario of liberalized
banking and financial exclusion has emerged because of two successive
phases of financial globalization: a macro-scale globalization beginning
in the late 1970s and persisting two decades; and a micro-scale
globalization that is, the movement across borders of banking firms
and banking practices - beginning in the late 1980s and still gathering
force. Contrary to those who view micro-scale globalization as shifting
formerly sheltered national banking systems toward efficiency, this
paper argues that micro-scale globalization is generating both financial
inclusion for the privileged and financial exclusion for the poor or
working poor. That is, the micro-scale globalization processes move
not only along an efficiency/inefficiency axis, but also along an axis
of wealth-equality/opportunity; and moves in the direction of
efficiency may force a given economy further from the point of
equality of opportunity and wealth.Este artigo argumenta que o corrente cenário mundial de liberalização bancária e exclusão financeira surgiu em virtude de duas sucessivas fases de globalização financeira: uma globalização em macro-escala iniciada no fim dos anos 70 e que persistiu por duas décadas; e uma globalização em micro-escala ou seja, o movimento além das fronteiras das firmas e práticas bancárias iniciada no fim dos anos 80 e que ainda reúne força. Contrário a aqueles que vêem a globalização em micro-escala , este artigo argumenta que a globalização em microescala está gerando uma inclusão financeira para os privilegiados e uma exclusão financeira para os pobres ou trabalhadores pobres. Ou seja, os processos de globalização em micro-escala não se movem somente ao longo do eixo eficiência/ineficiência, mas também ao longo de um eixo de riqueza-igualdade/oportunidade, e os movimentos na direção de uma eficiência podem forçar uma dada economia ir além do ponto de igualdade de oportunidade e riqueza
Roemer\u27s General Theory of Exploitation Is a Special Case: The Limits of Walrasian Marxism
In a series of recent writings, John Roemer (1982a, 1982b, 1985, 1988) has made a provocative claim: exploitation and class are merely second-order concepts within Marxian theory, because both phenomena derive directly from differential ownership of productive assets (DOPA); indeed, exploitation remains a consistent index of economic injustice only if a “property relations” conception of exploitation replaces the common “labor-value” view. In sum, property relations, not the labor exchange, the labor proces, labor values, or even capitalist accumlation should be the central concern of Marxian theory
INTERRELATED BANK STRATEGIES, FINANCIAL FRAGILITY AND CREDIT EXPANSION: A POST KEYNESIAN APPROACH
This paper aims at clarifying the relationship between individual bank and banking industry behavior in credit expansion. We argue that the balance sheet structure of an individual bank is only partially determined by its management decision about how aggressively to expand credit; it is also determined by the balance sheet positions of other banks. This relationship is explicitly shown by a disaggregation of the variable that enters into the simple money multiplier. The approach developed here opens a way to integrating the micro and macro levels in a Keynesian banking-system analysis.
THE GLOBAL CRISIS AND THE GOVERNANCE OF POWER IN FINANCE
This article examines why the global financial crisis that began in 2007 has intensified
policy debate about financial regulation and governance, and brought about the end
of polite discourse in economics. Coming into the crisis, the received view on financial
regulation regarded power in finance as a matter of market concentration alone, and
understood concentration as stabilizing and an indication that competitively fit firms
were dominating the market. This article argues that the current crisis necessitates
a refraining of our understanding regarding the governance—not simply regulation—of
finance. At the core of this reframing must be a much richer, multi-dimensional conception
of power and its implications in financial systems. This article argues that the locus
of power in finance has shifted with the rise of the "originate-and-distribute" model
in the 2000s. This shift created new possibilities for rent-extraction and speculation,
to which the existing model of regulation was not prepared to react. The subprime
crisis emerged precisely, in the view developed here, in the context of this crisis
in the governance of power in finance. So restoring effective financial regulation
will require a deep rethinking of what finance has become, and what it should be.
The challenge is profound, for resolving the nearly global crisis of financial systems—and,
by extension, of macroeconomic stagnation—depends on recognizing and responding to
the considerable, multi-dimensional power accumulated by the very financial firms
whose dysfunctionality helped create that crisis in the first place.
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Three Futures for Postcrisis Banking in the Americas: The Financial Trilemma and the Wall Street Complex
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