Financialised Capitalism: Crisis and Financial Expropriation

2009 ◽  
Vol 17 (2) ◽  
pp. 114-148 ◽  
Author(s):  
Costas Lapavitsas
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Financial Services ◽  
Investment Banking ◽  
Mortgage Lending ◽  
Public Provision ◽  
Current Crisis ◽  
The Usa ◽  
Alternative Sources ◽  
Open Markets

AbstractThe current crisis is one outcome of the financialisation of contemporary capitalism. It arose in the USA because of the enormous expansion of mortgage-lending, including to the poorest layers of the working class. It became general because of the trading of debt by financial institutions. These phenomena are integral to financialisation. During the last three decades, large enterprises have turned to open markets to obtain finance, forcing banks to seek alternative sources of profit. One avenue has been provision of financial services to individual workers. This trend has been facilitated by the retreat of public provision from housing, pensions, education, and so on. A further avenue has been to adopt investment-banking practices in open financial markets. The extraction of financial profits directly out of personal income constitutes financial expropriation. Combined with investment-banking, it has catalysed the current gigantic crisis. More broadly, financialisation has sustained the emergence of new layers of rentiers, defined primarily through their relation to the financial system rather than ownership of loanable capital. Finally, financialisation has posed important questions regarding finance-capital and imperialism.

scholarly journals The Subprime Mortgage Lending Collapse: Should We Have Seen It Coming?

2011 ◽  
Vol 6 (12) ◽  
Author(s):  
Jared E. Hojnacki ◽  
Richard A. Shick
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Mortgage Lending ◽  
Housing Values ◽  
Current Crisis ◽  
Rescue Operation ◽  
Subprime Mortgage ◽  
The Great Depression ◽  
Mortgage Crisis ◽  
The U.S

The subprime mortgage lending crisis and the decline in housing values has profoundly affected the worlds’ financial markets.  Financial institutions have ceased to exist, others have come under the U.S. government’s control, the future survival of others has been threatened and the U.S. government is proposing the greatest financial rescue operation since the Great Depression.  Profound changes in the financial markets have occurred and the markets will never be quite the same again.  This paper presents the argument that this collapse should have been foreseen by tracing and comparing the development and decline in the subprime auto lending market in the 1990’s to the development and decline of the subprime mortgage lending market.   While the effects of the subprime mortgage crisis are greater and farther reaching than those of the subprime auto lending market, there is no question that the similarities are plain to be seen and that the current crisis should come as no surprise.

COVID -19 and Indian Financial Markets: A Review

2020 ◽  
Vol 16 (02) ◽  
pp. 1-8
Author(s):  
Kamaldeep Kaur Sarna
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Financial Services ◽  
Stock Markets ◽  
Global Economy ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Negative Impact ◽  
Management Strategies ◽  
The Impact

COVID-19 is aptly stated as a Black Swan event that has stifled the global economy. As coronavirus wreaked havoc, Gross Domestic Product (GDP) contracted globally, unemployment rate soared high, and economic recovery still seems a far-fetched dream. Most importantly, the pandemic has set up turbulence in the global financial markets and resulted in heightened risk elements (market risk, credit risk, bank runs etc.) across the globe. Such uncertainty and volatility has not been witnessed since the Global Financial Crisis of 2008. The spread of COVID-19 has largely eroded investors’ confidence as the stock markets neared lifetimes lows, bad loans spiked and investment values degraded. Due to this, many turned their backs on the risk-reward trade off and carted their money towards traditionally safer investments like gold. While the banking sector remains particularly vulnerable, central banks have provided extensive loan moratoriums and interest waivers. Overall, COVID-19 resulted in a short term negative impact on the financial markets in India, though it is making a way towards V-shaped recovery. In this context, the present paper attempts to identify and evaluate the impact of the pandemic on the financial markets in India. Relying on rich literature and live illustrations, the influence of COVID-19 is studied on the stock markets, banking and financial institutions, private equities, and debt funds. The paper covers several recommendations so as to bring stability in the financial markets. The suggestions include, but are not limited to, methods to regularly monitor results, establishing a robust mechanism for risk management, strategies to reduce Non-Performing Assets, continuous assessment of stress and crisis readiness of the financial institutions etc. The paper also emphasizes on enhancing the role of technology (Artificial Intelligence and Virtual/Augmented Reality) in the financial services sector to optimize the outcomes and set the path towards recovery.

PMI: mortgage backstop from the Alger Report to Dodd-Frank

2014 ◽  
Vol 22 (1) ◽  
pp. 43-48
Author(s):  
Adolph Neidermeyer ◽  
Naomi E. Boyd ◽  
Presha Neidermeyer
Keyword(s):  
Financial Institutions ◽  
Income Tax ◽  
Design Methodology ◽  
Historical Perspective ◽  
Critical Role ◽  
Mortgage Lending ◽  
Content Type ◽  
The Usa ◽  
Federal Income Tax ◽  
Historical Role

Purpose – The purpose of this paper is to provide a historical perspective and going-forward assessment of the importance of private mortgage insurance (PMI) entities in the residential-lending landscape in the USA. Design/methodology/approach – Financial data from the PMI entities and federal income tax data were analyzed to comment on the importance of the PMI entities in the historical and current mortgage-lending environment. Findings – PMI entities played a critical role in expanding the population of mortgage candidates for financial institutions. Through the guarantees offered by PMI entities, financial institutions granted loans to individuals who otherwise would not have qualified for mortgages. Originality/value – No prior research has assessed the overall historical role played by these primary PMI entities.

Introduction

2018 ◽  
Author(s):  
Mccormick Roger ◽  
Stears Chris
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Financial Services ◽  
Financial System ◽  
The Other ◽  
Legal Risk ◽  
The People ◽  
European Banking ◽  
Prospective Risk

This introductory chapter first sets out the book’s purpose, which is to describe and explain legal and conduct risk, and suggest possible approaches to the management of these risks. Legal risk is defined as risk arising in the operation and practices of the financial markets. They are a part of the spectrum of risks that are inherent in the operations of banks and other financial institutions, affecting the lives of the people who work there and the customers who put their trust in them as well as, in more extreme cases, the financial system itself. On the other hand, the European Banking Authority defines conduct risk as ‘the current or prospective risk of losses to an institution arising from an inappropriate supply of financial services including cases of wilful or negligent misconduct’.

scholarly journals Rural credit markets in South Africa: A review of theory and empirical evidence

2014 ◽  
Vol 12 (1) ◽  
pp. 363-374 ◽  
Author(s):  
Joseph Chisasa
Keyword(s):  
South Africa ◽  
Financial Markets ◽  
Financial Institutions ◽  
Financial Services ◽  
Credit Markets ◽  
Smallholder Farmers ◽  
Policy Implications ◽  
Medium Size ◽  
Rural Credit ◽  
Rural Credit Markets

The demand for and supply of financial services in general and credit instruments in particular by rural South Africa still remains a confounding problem. The aim of this paper is to determine the status of rural credit markets in South Africa by reviewing theory and evidence from empirical studies. It is observed that financial markets in South Africa are fragmented between formal and informal markets. Formal financial markets generally serve urban and peri-urban areas with a thin distribution of services to people living in rural areas. Rather, informal financial institutions such as savings clubs (stockvels), co-operatives, moneylenders (mashonisas) and village banks are the more dominant providers of financial services. Commercial banks and other formal financial institutions cite high operating costs such as information gathering, monitoring and enforcement as some of the reasons for limited participation in rural financial markets. Such attitudes have been observed to retard entrepreneurial innovation and growth among small to medium size enterprises and smallholder farmers. Results of this analysis have policy implications in the areas of reduction of unemployment, poverty and sustainable economic growth in South Africa. Policies directed at increasing financial intermediation via formal financial institutions are recommended

Part I The General Context, 2 Risk and Capital

2018 ◽  
Author(s):  
Mccormick Roger ◽  
Stears Chris
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Financial Institutions ◽  
Financial Services ◽  
Economic Activity ◽  
Global Financial Crisis ◽  
Economic Recession ◽  
General Context ◽  
Financial Difficulty ◽  
Conservative Attitude

This chapter considers the link between issues of risk and capital. It argues that although all commercial enterprises take risks, the activities of banks and other financial services enterprises give rise to special considerations because they may attract funds from individuals who have either no appetite for risk or a much more conservative attitude to risk. Moreover, the interconnection between financial institutions in the wholesale financial markets also means that if one institution gets into financial difficulty there is a serious risk, as the recent global financial crisis has shown, that the problem may spread rapidly to other financial institutions and cause serious financial instability, damaging economic activity across the board. Indeed, the evolution of the ‘credit crunch’ into the financial crisis, triggering the global economic recession that began in 2008, appeared to follow exactly this pattern.

Financial Services and International Competitiveness of the Taiwan Industry

2001 ◽  
Vol 04 (03) ◽  
pp. 311-324 ◽  
Author(s):  
Chi-Lin Wea
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Asset Management ◽  
Financial Services ◽  
Current Status ◽  
Market Transparency ◽  
Resolution Trust Corporation ◽  
The Government ◽  
Set Up ◽  
Trust Corporation

In order to cope with the changing financial landscape, the government in Taiwan has put forth financial reform measures and supplementary packages. In this paper, we shall discuss four main themes including the establishment of Asset Management Company/Resolution Trust Corporation to help financial institutions quickly clear up bad loans, the disclosure of open public financial information to increase market transparency, the set up of a Financial Supervisions Commission to unify the work of financial supervisions and financial examinations, and the promotion of merger, shareholdings, and alliances among financial institutions to raise the competitive power of Taiwan banks in international financial markets. Each topic begins with a description of the current status, government policies and strategies, and then brings up some issues worth discussing.

Modernization of Antimonopoly Policy in Russia (Economic Analysis of Proposed Changes in the Competition Law)

2005 ◽  
pp. 100-116
Author(s):  
S. Avdasheva ◽  
A. Shastitko
Keyword(s):  
Economic Analysis ◽  
Financial Markets ◽  
Financial Services ◽  
Competition Law ◽  
Commodity Markets ◽  
State Aid ◽  
Executive Power ◽  
Rule Of Reason ◽  
Per Se

The article is devoted to the analysis of the draft law "On Protection of Competition", which must substitute the laws "On Competition and Limitation of Monopolistic Activity on Commodity Markets" and "On Protection of Competition on the Financial Services Market". The innovations enhancing the quality of Russian competition law and new norms providing at least ambiguous effects on antimonopoly regulation are considered. The first group of positive measures includes unification of competition norms for commodity and financial markets, changes of criteria and the scale of control of economic concentrations, specification of conditions, where norms are applied "per se" and according to the "rule of reason", introduction of rules that can prevent the restriction of competition by the executive power. The interpretation of the "collective dominance" concept and certain rules devoted to antimonopoly control of state aid are in the second group of questionable steps.

Opportunities for improving the insider laws: A comparative analysis of the practice in the USA and Russia

2020 ◽  
Vol 26 (4) ◽  
pp. 796-814
Author(s):  
E.K. Ovakimyan
Keyword(s):  
Financial Markets ◽  
Insider Trading ◽  
Negative Impact ◽  
Business Environment ◽  
Market Manipulation ◽  
Insider Information ◽  
Analysis And Synthesis ◽  
The Usa ◽  
Legislative Perfection ◽  
Definition Of

Subject. The article examines the laws regulating insider trading. Objectives. The study outlines recommendations for refining Law On Countering the Illegal Use of Insider Information and Market Manipulation and Amendments to Some Legislative Acts of the Russian Federation, № 224-ФЗ of July 27, 2010. Methods. The methodological framework includes a general dialectical method, analysis and synthesis, induction and deductions, and some specific methods, such as comparative and formal logic analysis to specify the definition of insider information, structural logic and functional analysis to improve the mechanism for countering insider trading and market manipulation. Results. We discovered key drawbacks to be addressed so as to improve the business environment in Russia. Although the Russia laws mainly mirror the U.S. laws, they present a more extended list of terms concerning the insider information. I believe the legislative perfection should be continued. Conclusions and Relevance. The study helps apply the findings to outline a new legislative regulation or amend the existing ones, add a new mention on the course of financial markets to students’ books, develop new methods for detecting and countering and improving the existing ones. If all parties to insider relationships use the findings, they will prevent insider trading crimes in financial markets and (or) reduce the negative impact of such crimes on the parties.

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