Banks’ Structural Power and States’ Choices on What Structurally Matters: The Geo-Economic Foundations of State Priority toward Banking in France, Germany, and Spain*

Abstract

Since the 2008 financial crisis, Europe's largest banks have largely remained unchallenged. Is this because of the structural power banks continue to hold over states? This article challenges the view that states are sheer hostages of banks’ capacity to provide credit to the real economy—the conventional definition of structural power. Instead, it sheds light on the geo-economic dimension of banks’ power: key public officials conceive the position of “their own” banks in global financial markets as a crucial dimension of state power. State priority toward banking thus results from political choices as to what structurally matters most for the state. Based on a discourse analysis of parliamentary debates in France, Germany, and Spain, as well as on a comparative analysis of the implementation of a special tax on banks, this article shows that power dynamics within states largely shape political priorities toward banking at both domestic and international levels.