During the 1990s, pension funds seemed to dominate the world's capital markets, reaping unprecedented rates of return. This stands in glaring contrast to the budgetary difficulties of most nonfunded ...European pension arrangements, which are a result of the changing demographic composition of the population. As a result, a growing number of European states is trying to transform the existing pay-as-you-go systems into funded pension arrangements. After a critical examination of these demographic projections, the claim that funded pension systems are not subject to ‘demographic stress’ is critically assessed. Finally, given the logic to which funded pension arrangements are subject, it is argued that the introduction of such institutions could result in a growing financialisation of the economy. It is claimed here that this is not without dangers for the long-term wealth-generating capacity of firms. So, not only are the reasons for pension restructuring less compelling than is generally thought, restructuring could also result in unwanted side-effects.
There is a strong case that mortgage-backed securities were at the root of the 2007–09 financial crisis. Even though geographers have convincingly demonstrated that loan origination is strongly ...locally rooted and that the fallout from the subprime mortgage crisis clearly had spatially circumscribed effects, securitization is still generally perceived as a universal, private, and purely market-based financial technique. In this paper we use a description of the securitization chain in the Netherlands to contest these perceptions. Building on and adding to Thomas Wainwright's analysis of securitization in the UK, we first argue that securitization in the Netherlands has taken a form which reflects Dutch corporatist institutional arrangements, implying that both geography and states do matter for the supposedly aspatial process of securitization. Second, we argue that the Dutch state has been very much implicated in the construction of the securitization market in the Netherlands. Third, we suggest that this can best be seen as an effect of ‘cognitive closure’ rather than of ‘regulatory capture’: that is, Dutch pro-banking regulation is not so much an effect of bankers hijacking regulators but, rather, more the result of bankers seducing regulators with their stories. This paper is a detailed case study of the workings of financialization and adds to the growing body of work which seeks to analyze the different ‘varieties of financialization’ and the variegated geographies of the financial crisis.
This article argues for a reconceptualization of financial innovation which, as culprit and victim of the current crisis, is now damned by those who once praised it. But what is financial innovation? ...The dominant answers from mainstream finance and social studies of finance share variations on a rationalistic view whereby financial innovation is about improving markets or at least extending the sphere of rational calculability. Because improvisation is more important than the dominant perspectives can admit, this article proposes a new concept of financial innovation whose three main elements - frame, conjuncture and bricolage - are indicated by the title of this article. The importance of this problem shift is that it highlights the inherent fragility of this type of intermediary-led financial innovation where things will often miscarry and highlights the need for a more radical rethinking about policy responses to the financial crisis that began in 2007.
This paper is about knowledge limits and the financial crisis. It begins by examining various existing accounts of crisis which disagree about the causes, but share the belief that the crisis ...represents a problem of socio-technical malfunction which requires some kind of technocratic fix: the three variants on this explanation are the crisis as accident, conspiracy or calculative failure. This paper proposes an alternative explanation which frames the crisis differently as an elite political debacle. Political and technocratic elites were hubristically detached from the process of financial innovation as it took the form of 'bricolage', which put finance beyond technical control or management. The paper raises fundamental questions about the politicized role of technocrats after the 1980s and emphasizes the need to bring private finance and its public regulators under democratic political control whose technical precondition is a dramatic simplification of finance.
The story of the financial turmoil that swept the world in 2007 and 2008 has proven to be geographical to the bone. In this introduction to the special issue on 'financial geographies' we express ...concerns that the financial crisis and all it has showcased is going to be economic geography's 'next missed boat'. We derive three problematics from the crisis—productivism, epochal thinking and rationality—and discuss the extent financial geography is positioned to address them. The second aim of the introduction is to present an overview of the papers in this special issue and the ways in which they take up the issues raised in this introduction.
Taking Pluralism Seriously Bader, Veit; Engelen, Ewald R.
Philosophy & social criticism,
07/2003, Volume:
29, Issue:
4
Journal Article
Peer reviewed
There is a growing sense of dissatisfaction among political philosophers with the practical sterility and empirical inadequacy of the discipline. Post-Rawlsian philosophy is wrestling with the need ...to construct a ‘contextualized morality’ that is sensitive to the particularities and complexities of actual moral reasoning but does not succumb to the temptations of relativism. We argue that this predicament is due to its inability to take the pluralism of our moral universe, the multi-layeredness of our social reality, the indeterminacy of our normative principles and the complexity of our practical reasoning seriously. To incorporate these properties of the ‘human condition’ we have constructed a complex evaluative framework, balancing moral, ethico-political, prudential and realist criteria. We argue that political philosophy new style is well advised to adopt such a framework and to position itself, as a true ‘art’, between political philosophy old style and the social sciences. Thus political philosophy is better equipped to deal with the big tradeoffs of today, rekindle our utopian hopes and regain political bite.
Securitization across borders Bassens, David; Engelen, Ewald; Derudder, Ben ...
Journal of economic geography,
01/2013, Volume:
13, Issue:
1
Journal Article
Peer reviewed
Open access
This article discusses the case of securitization in Islamic finance to tease out what is universal and what is specific about this technique. To do this, the article frames the spatial dispersal of ...securitization as a form of ‘organizational mimicry’, which highlights that techniques always rely for their functioning on locally rooted ‘cultures of practice’, suggesting that successful transplantations require adaptation in both context and technique. This article adds to the prevalent literature on mimicry a geographical perspective by investigating to what extent this double shift can also be traced in the geo-historical dispersal of securitization in Islamic markets.
International financial centres used to be stable economic clusters held together by the centripetal forces emanating from physical exchanges. However, given near complete 'virtualisation', these ...'anchors' have gradually disappeared. As this article demonstrates, this has had telling consequences for second-tier financial centres like Amsterdam and Frankfurt. Empirically, the article adds cases of financial centre decline to the existing collection of case descriptions. Theoretically, the article assesses the explanatory capacity of the combination of two complementary theoretical perspectives, New Economic Geography and Comparative Political Economy, by determining to what extent they fit the two case studies.
Since the late 1980s, social scientists have argued that advanced economies have undergone a process of financial concentration that is resulting in a growing unevenness of the accessibility of ...capital. Households, small and medium-sized businesses as well as non-standard economic activities have increasing difficulties in finding funds. There are both sound economic and compelling moral reasons to address this issue. In order to ensure a more equal accessibility of capital, the author proposes a mandatory levy on the surpluses of mainstream pension funds to fund an alternative financial infrastructure as a first step to redressing unevenness. The underlying rationale is that “financial pluralism” is the key to a more even accessibility of capital.
PDF
