Knafo - The Power of Finance in the Age of Market Based Banking.pdf (246.13 kB)
The power of finance in the age of market based banking
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.
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Publication status
- Published
File Version
- Accepted version
Journal
New Political EconomyISSN
1356-3467Publisher
Taylor & FrancisExternal DOI
Issue
1Volume
27Page range
33-46Department affiliated with
- International Relations Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2021-04-16First Open Access (FOA) Date
2022-10-07First Compliant Deposit (FCD) Date
2021-04-15Usage metrics
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