The power of finance in the age of market based banking

Knafo, Samuel (2022) The power of finance in the age of market based banking. New Political Economy, 27 (1). pp. 33-46. ISSN 1356-3467

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It has long been assumed that marketisation would undermine banks, a claim reflected in the common opposition of market and bank-based finance. But as recent research shows, some banks have flourished in the marketized environment of financialisation. I argue the reason they have come to dominate financialisation stems from a revolution in funding that began in the 1960s with the rise of liability management. This practice enabled some banks to dramatically leverage their operations and expand their balance sheet. The new funding practice also impacted the business model of US banks fuelling a move from lending to trading. As I show, this revolution in finance shifted the power away from lenders and towards leveraging financial agents that focused on capturing assets through predatorial strategies.

Item Type: Article
Schools and Departments: School of Global Studies > International Relations
SWORD Depositor: Mx Elements Account
Depositing User: Mx Elements Account
Date Deposited: 16 Apr 2021 07:51
Last Modified: 18 Mar 2022 12:30

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