Too Big to Manage: US Megabanks’ Competition by Innovation and the Microfoundations of Financialization
Article
Cerpa Vielma, N., Cömert, H., D’Avino, C., Dymski, G., Kaltenbrunner, A., Petratou, E. and Shabani, M. 2019. Too Big to Manage: US Megabanks’ Competition by Innovation and the Microfoundations of Financialization. Cambridge Journal of Economics. 43 (4), p. 1103–1121. https://doi.org/10.1093/cje/bez027
Authors | Cerpa Vielma, N., Cömert, H., D’Avino, C., Dymski, G., Kaltenbrunner, A., Petratou, E. and Shabani, M. |
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Abstract | Disagreements over the systemic implications—the future—of financialization can be traced in part to the absence of sustained attention to the role of banking firms in driving this secular shift forward. That is, the financialization literature lacks an adequate microfoundation. Accounting for the drivers of financialization processes solely at the macro level overlooks the problems of how these processes came about and whether they are sustainable. This paper addresses this explanatory gap, arguing that a key independent microeconomic driver of increasing financialization did exist: the incessant efforts by money-centre banks in the USA to break out of Depression-era restrictions on their size, activities, and markets. These banks’ growth strategies in turbulent times led to an institutional (meso) shift—the rise of a megabank-centred shadow banking system—that now shapes global financial architecture even while operating in ways that are unsustainable. In short, too-big-to-manage megabanks are at the heart of the fragility and instability of the economy today. |
Journal | Cambridge Journal of Economics |
Journal citation | 43 (4), p. 1103–1121 |
ISSN | 0309-166X |
Year | 2019 |
Publisher | Oxford University Press for Cambridge Political Economy Society |
Accepted author manuscript | License File Access Level Anyone |
Digital Object Identifier (DOI) | https://doi.org/10.1093/cje/bez027 |
Web address (URL) | https://doi.org/10.1093/cje/bez027 |
Publication dates | |
06 Aug 2019 | |
Online | 04 Jul 2019 |
Publication process dates | |
Accepted | 20 May 2019 |
Deposited | 20 Sep 2019 |
Copyright holder | © 2019 Oxford University Press. |
Copyright information | This is a pre-copyedited, author-produced version of an article accepted for publication in Cambridge Journal of Economics following peer review. The version of record: Nicole Cerpa Vielma, Hasan Cömert, Carmela D’Avino, Gary Dymski, Annina Kaltenbrunner, Eirini Petratou, Mimoza Shabani, Too big to manage: US megabanks’ competition by innovation and the microfoundations of financialization, Cambridge Journal of Economics, Volume 43, Issue 4, July 2019, Pages 1103–1121, is available online at: https://doi.org/10.1093/cje/bez027. |
https://repository.uel.ac.uk/item/8712v
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