Global finance after the credit crisis

Abstract

Although the author regards the current financial crisis as a crisis of finance itself, he sees neither financial globalisation nor the increasing importance of financial markets as being interrupted by the crisis. Instead, the direction of changes to the financial system is determined by new possibilities in the political spectrum due to the recent setback for the neoliberal project. Regarding future developments, he distinguishes two possible but contradictory scenarios. Firstly, because of falling interest rates and profits, the crisis could lead to a period of cheap money. In this case the power structures would change in favor of the working class, which could among other things be evidenced in a higher relative wage share. Secondly, the rescue of the financial sector via public money could lead to radical reforms in the financial sector. This could go hand in hand with a substantial realignment of the social and economic objectives of the financial system.