Entrepreneurial Urbanism After the Crisis: Ireland's “Bad Bank” and the Redevelopment of Dublin's Docklands

The development of Dublin's Docklands was paradigmatic of the speculative storm that overwhelmed the Irish economy between the late 1990s and the crisis of 2008. It also served as a textbook case of entrepreneurial urbanism, with the development agency driving private‐led development on a former industrial and waterfront site. Following the crash, however, the key actors have been decimated: the development agency itself, the developers and the banks. This article traces the re‐emergence of Docklands development in order to analyse post‐crisis urban development. I argue that the latest phase of development reproduces key aspects of entrepreneurial urbanism, but also includes novel aspects. In particular, the National Asset Management Agency, a “bad bank” set up to rescue the financial sector, emerges as a major force. The article contributes to debates on urban development after the crash, and the specific relationship between post‐crisis entrepreneurial urbanism and financialization.     

Setting the rules: private power,political underpinnings,and legitimacy in global monetary and financial governance

The role of private market agents in global monetary and financial governance has increased as globalization has proceeded. This shift in both markets and patterns of governance has often been encouraged by states themselves in pursuit of liberalization policies. Much of the literature views these developments in a positive light, yet there are other aspects of these developments that also merit attention. This article supports its central propositions with two cases of emerging global financial governance processes: the Basel II capital adequacy standards for international banking supervision and the International Organization of Securities Commissions‐based transnational regulatory processes underpinning the functioning of cross‐border securities markets. Based on the case findings, the article argues first that private sector self‐regulation and/or public‐private partnership in governance processes can leave public authorities vulnerable to dependence on the information and expertise provided by private agents in a fast‐moving market environment. Policy in the vital domain of financial regulation has been increasingly aligned to private sector preferences to a degree that should raise fears of bureaucratic capture. Second, the article contends that the overall outcome in terms of global financial system efficiency and stability has been mixed, bringing a range of important benefits but also instability and crisis for many societies to a degree that has led to challenges to global governance itself. The case material indicates that the input, output and accountability phases of legitimacy in global monetary and financial governance are highly problematic, and much of the problem relates to the way in which private market agents are integrated into the decision‐making process. Third, the article posits that a better consideration of these three ‘phases’ of legitimacy and their interrelationships is likely to enhance the political underpinnings and legitimacy of global financial and monetary order.     

The South Korean financial crisis: competing explanations and policy lessons for financial liberalization

There are two types of explanations of the Asian financial crisis: the 'fundamentalist', which focuses on macroeconomic imbalances; and the 'self-fulfilling', which ascribes the crisis to beliefs. This article argues that while both have some merit in explaining the Korean crisis, neither fits the facts very well. The authors put forward a new explanation which emphasizes the role played by financial liberalization and the structural weaknesses in the banking system. They explain that the combination of these factors created conditions that made the Korean banking system vulnerable to the sentiments of foreign investors, simultaneously eroding the ability of the Korean central bank to act effectively as a lender of last resort. The authors examine how various policy mistakes aggravated the crisis and draw some conclusions that may be useful for other emerging market economies.     

Bank Liquidity Creation in Russia

Two EU-based senior economists analyze the contribution of bank liquidity creation to the Russian economy, as well as changes in creation of liquidity occurring during the global financial crisis. Applying the methodology of Berger and Bouwman's (2009) study of U.S. banking to a rich panel dataset for Russian banks for the period 1999-2009, the authors compute three alternative measures of bank liquidity creation. They find evidence of increased creation of liquidity in real terms over the period and also determine that state-controlled (versus private) banks and Russia's largest banks (versus intermediate-size and small banks) contributed most to liquidity creation (lower in Russia than in the U.S.). Their findings suggest that consolidation of the Russian banking sector may prove more instrumental in increasing liquidity creation than privatization per se.     

Financial crises and the balance of power in international finance, 1890–2010

Has the centre of gravity of international finance irreversibly started to shift from the Atlantic to the Pacific since the financial debacle of 2007-2008? This article discusses this highly topical question in a historical perspective, by considering previous changes in the balance of power in international finance and the role played by global financial in these changes. Particular attention is paid to the Baring Crisis of 1890, the American Panic of 1907, the financial crisis of July -August 1914, the banking crises of the Great Depression of the 1930s, the financial instability of the early 1970s and the ensuing banking failures, the International Debt Crisis of 1982, and the Japanese Banking Crisis of 1997-8. The article concludes that financial crisis, perhaps surprisingly, did not lead to clear changes in the balance of power in international finance; and that the financial debacle of 2007-8 is unlikely, in the medium-term, to fundamentally alter the current order.     

Taming Foreign Exchange Derivatives Markets? Speculative Finance and Class Relations in Brazil

This article provides a critical interrogation of the Brazilian tax on foreign exchange derivatives deployed between 2011 and 2013. It analyses the drivers of the policy‐making process that led to implementation of the measure, locates it within the broader policy response regarding the management of cross‐border capital flows and speculative finance, and assesses its political economy significance in light of class dynamics. The author makes three arguments. First, this innovative policy tool must be interpreted in terms of the emergence of a specific form of state power allowing for the continuation of finance‐led strategies of accumulation, while mitigating some of their worst consequences. Second, this form of state power internalizes the subordinate positionality of Brazil in the global financial and monetary system. Third, while financialization processes have eroded the efficiency of a number of policy tools, this policy experiment demonstrates the possibility of regulating complex financial markets, provided that appropriate resources are dedicated to the task, and that there is the political will to do so. The article concludes by discussing theoretical implications, for how to theorize state and financialization, as well as political implications.     

金融危机与日本业内规制演进分析

日本金融市场上历次出现的金融危机,暴露了日本金融规制体系存在的问题,也影响了金融业规制政策的重点和发展方向。1927年昭和银行危机后实施的对策为“护送舰队”式规制提供了前提。日本的泡沫经济、1997年的亚洲金融危机对规制产生了影响,2007年由美国爆发的金融危机及其引发的全球金融海啸,影响了日本金融业规制的发展。日本金融业规制在金融危机的影响下,从限制竞争的“事前规制”演进到注重健全经营的“事后规制”,目前正向“事前规制”与“事后规制”相结合的以防范系统性风险为目的的保护性规制体系演进。     

The Electoral Foundations of Japan's Banking Regulation

This article locates Japan's financial policies in the context of electoral incentives. The collapse of Japan's economic bubble in 1990 exposed the rot in the banking system, hidden for decades by a Liberal Democratic Party (LDP) government intent on maintaining favor with local support groups and protecting inefficient small banks. In a move wholly uncharacteristic of Japan's postwar politics, the LDP ultimately forced the banks to absorb huge losses rather than require taxpayers to bail out their mortgage-lending subsidiaries (jusen). We compare the government's subsequent bank bailout scheme with past government action and find that the government's objectives have shifted from boosting bank profits to ensuring their prudential regulation. We conclude on an optimistic note about the prospects for more public goods-oriented politics in Japan.     

Can South–South Cooperation Compete? The Development Bank of Latin America and the Islamic Development Bank

Southern‐led multilateral development banks (MDBs) play a key role in harnessing global capital to finance the sectors most important to borrowers, especially infrastructure. Two prominent Southern MDBs, the Development Bank of Latin America (CAF) and the Islamic Development Bank (IsDB), have become crucial drivers of regional infrastructure growth. This article explores whether their performance has lived up to their goals of establishing borrower control over bank governance without sacrificing financial dynamism. Using power‐weighted voting indices for member representation on bank boards, the authors determine that these banks offer borrowers much more representation on their boards than do their Northern‐based counterparts, the Inter‐American Development Bank (IDB) and the World Bank International Bank for Reconstruction and Development (IBRD). The article also analyses bank operations to determine whether their governance structure impacts their internal performance, as reflected on balance sheets, and external performance — gaining relevance in development finance and particularly in infrastructure lending, including the burgeoning sector of sustainable (climate‐resilient) infrastructure. The authors find that the CAF and IsDB have become major players in development finance, including in sustainable infrastructure. However, important issues remain in relation to their continued internal capacity development, especially with regard to the environmental and social safeguards necessary to oversee lending.     

Islamic Banking in Practice: the Case of Pakistan

In Islamic banking rules apply which differ from those in traditional banking. This article first discusses the consequences of Islamic banking for financial operations in general, then goes on to examine the Islamic procedures introduced in Pakistan's banking sector since 1985. Considering the drastic change in procedures, the effect of Islamization on this sector has been moderate. One reason for this is that banks in Pakistan have consistently opted for financial instruments closely resembling interest-based finance. Another reason is that their behaviour has been determined to a large extent by the fact that they are state-owned.     

Introduction: Reconsidering Futurism

The financial crisis hit Italy harder than many other Eurozone countries. In part this was due to the fact that the crisis came upon a system that was weakened by years of sub-par economic growth. One of the several endogenous factors that explain the stagnation of the Italian economy is the weak corporate governance in the industrial sector and parts of the financial one. A framework that was designed to maintain stability in the ownership of companies and of certain types of banking institution ultimately led to an inefficient allocation of capital and to a lack of investment, which contributed to the loss of competitiveness of Italian firms in a fast globalizing marketplace.     

The Campbell Committee and the origins of ‘deregulation’ in Australia

The 1981 Australian Financial System Inquiry, known as the Campbell Committee, is widely seen as the start of the reform movement of the 1980s and 1990s. Accounts of its origins have been dominated by a debate about which policy actor can take credit. This paper utilises cabinet and Reserve Bank archives to reassess the origins of the Campbell Committee. The inquiry had its origins in an earlier attempt by the Whitlam government to take federal control of the regulation for non-bank financial institutions and the building society crisis of the mid-1970s. In its response to these political and economic challenges we can identify the moment in which the Fraser cabinet turned towards market-based reform. The political decisions made in the context of crisis set the path for regulatory change in subsequent decades, particularly in the area of prudential regulation, where we have seen regulatory consolidation and expansion rather than ‘deregulation’.     

San Juan,the Fragile City: Finance Capital,Class, and the Making of Puerto Rico's Economic Crisis

This paper narrates Puerto Rico's fiscal and financial crisis through a reading of San Juan's urban landscape. We underscore the role of capital in the city, primarily embodied by the local capitalist class (the Criollo bloc) and foreign capitalists. Historically excluded from the manufacturing sector (dominated by US capitalists), the Criollo bloc accumulates its wealth by concentrating financial assets in the city. In times of crisis, the Criollo bloc resorts to the acquisition of new assets and asset exchange with foreign capitalists to remain solvent and provide short‐term solutions to the state's fiscal and financial limits. The survival of the local capitalist class, we demonstrate, is dependent on asset stripping. Drawing on Clyde Woods, we document how asset stripping unevenly redistributes wealth and risks along class and racial lines within a colonial economy. The finance capital/asset stripping basis of San Juan's economy renders it an extremely fragile city, we contend.     

战后初期日本金融改革与主银行体制的延续

战后初期的日本金融改革,是在盟军统帅部要求摧毁日本军国主义经济基础和战后初期日本经济濒临崩溃的双重背景下进行的。金融改革在摧毁战时金融的基础上,进一步试图将日本金融“美国化”,但因美国体制在日本“水土不服”,“美国化”最终归于“日本化”。本文在论述日本金融改革的基础上,考察战时日本金融的状况,得出战时形成的主银行体制在改革期间并未被中止,而是依然延续的结论。     

Financialization of hotel corporations in Spain

One of the cutting-edge topics being currently debated in social sciences is the impact of financialization on corporations and on different geographical contexts. Surprisingly enough, there have been very few studies that have explicitly dealt with this issue within tourism studies. In this paper, the issue of financialization within tourism is addressed through an analysis of hotel corporations. Taking a case-study approach, it is argued that Spanish hotel chains are increasingly becoming financialized since a minimization of the impact of global financial crisis on these corporations is urgently required. The argument is not that hotel corporations’ financialization is necessarily new, but rather that the impact of the global financial crisis has led to an intensification of this very process. Taking as case studies the three largest Spanish hotel corporations (Meliá Hotels International, NH Hoteles and Grupo Barceló), the current crisis-led hotel financialization is dealt through four interrelated spheres: (1) built environment (hotel buildings property becoming controlled by financial funds), (2) actors (emergence of new agents as a result of hotel corporations intertwining with financial corporations), (3) hotel profit extraction (reliance on the secondary circuit of capital), (4) financial engineering instruments (forms of fictitious capital that are new in the context of hotel corporations). The article shows how the process of financialization of hotel corporations illustrates broad trends of both financialization and capital accumulation. Specifically, the main findings are on one hand, that financialization not only fixes capital on the ground, but also creates liquidity. On the other hand, that the selling of property titles is an increasing profit niche with differentiated geographical locations. The last significant finding is that financialization helps to improve profitability of non-financia corporations such as hotel chains.     

Dealing with the banks: populism and the public interest in the global financial crisis

Political protest in Europe and the problematic politics surrounding bank recapitalization in the US have raised growing concerns about the rise of populist politics. Populist politics is problematic in its search for simplistic solutions to complex problems, its disdain for institutions and its political ambiguity. Nonetheless, the rise of populist mobilization also points to genuine concerns about the functioning of democracy. The politics of financial regulation has been dominated by a narrow, utilitarian and technocratic mode of policy-making that has tried to limit public debate, favouring an expert discourse which privileges questions of efficiency over questions of distribution. This article explores the distributional issues at stake in banking recapitalization (particularly questions about the returns governments receive for their investment) and regulation (through an exploration of the financialization literature). It argues that, while populist appeals to 'the people' are too ambiguous to be helpful, given the complexity of the interests at stake in financial regulation, there is a need for a wider and more democratic debate about financial regulation that pays greater attention to distributional issues. Populist mobilization can create pressure for debate, even if it presents few solutions. As a result, we should be wary of moves to shift too much regulation to the international level where populist mobilization is less effective.     

Following a ‘standstill’: An ethnographic approach to financialization

This article addresses Dubai's recent financial crisis, bringing an ethnographic approach to ‘financialization’. It does so by repurposing the financial concept of ‘standstill’. Focusing on the consequences of the Dubai government's infamous ‘standstill announcement’, in late 2009, it argues that unpacking the literal and figurative registers of this concept offers insights into the political economy and lived experiences of financial crises.     

Averting a global financial crisis: the US,the IMF,and the Mexican debt crisis of 1976

This article explains the politics and diplomacy of the initial use of an International Monetary Fund (IMF) adjustment program as a tactic in a strategy to avert a possible global banking crisis. Scholars typically date the strategy to the Reagan administration's response to the sovereign debt crises in Eastern Europe and Latin America in the early 1980s. This article demonstrates that the approach originated instead during the 1976 Mexican debt crisis – the first potential postwar default by a developing country that threatened international bank failures. Key US and Mexican officials recognized that an IMF program of currency devaluation and austerity would probably fail in its stated objective of reducing Mexico's balance of payments deficit. Nevertheless, US Treasury and Federal Reserve officials, fearing that a Mexican default might lead to bank failures and subsequent global financial crisis, intervened to an unprecedented degree in the negotiations between the IMF and Mexico. The United States offered direct financial support and worked through diplomatic channels to insist that Mexico accept an IMF adjustment program, as a way of bailing out US banks. Mexican president Luis Echeverría's administration consented to IMF adjustment because officials perceived it as the least politically costly option among a range of alternatives.     

Shale gas and the revival of American power: debunking decline?

The spectre of American decline is once again animating both observers and practitioners of US foreign policy. The global financial crisis, a faltering American economy and continued costly and controversial military engagements overseas have been presented as conclusive proof that American foreign policy will soon lack the resources needed to sustain its previous international hegemony. Arguments of domestic weakness have been linked to analyses of the economic vitality of America's competitors to demonstrate a seemingly watertight case for relative decline. The inexorable rise of China has been presented from various quarters as evidence that the American era will soon be drawing to a close. Yet, such declinist arguments continue to suffer from fundamental weaknesses, overestimating the likely future strength of America's rivals while concurrently downplaying the capacity of the US to rejuvenate its economy and thus revivify its liberal universalist creed. The most interesting development in this regard has been the sudden resurgence of the US energy sector. Written off less than a decade ago as being in terminal decline, the American oil and gas industry has staged a remarkable recovery. Vast reserves of shale gas and accompanying tight oil offer the potential to aid the revival of the American economy, with some forecasts pointing to US energy self‐sufficiency within two decades. Notions of US relative decline may yet prove premature. The geopolitical impact of American energy self‐sufficiency is likely to be very significant, making an important contribution to a reversal of the US trade deficit, a revival of America's industrial base, and the possibility of a corresponding relative decline in power for conventional fossil fuel exporters.     

How Finance Penetrates its Other: A Cautionary Tale on the Financialization of a Dutch University

If any organization ought to be immune to the forces of financialization, it is a publicly funded university in corporatist Europe. Shielded from the intrusion by financial metrics, values and professionals through a strong historically rooted tradition of self‐management by powerful professional guilds, continental universities should largely have avoided the marketization and managerialization of Anglophone universities. Not so, this case study of a Dutch public university suggests. From 1995 onwards, a shift in real estate management—devolving responsibilities from the Dutch state to universities—served as a Trojan horse for financialization, triggering changes in organizational culture and a power shift from teaching and research professionals to accountants, real‐estate developers, financiers and their ilk. This case suggests that the power of finance is such that no societal domain is immune. The paper ends with a call for more non‐metropolitan case studies of financialization and argues that the only hope for salvation is a more self‐conscious defense of traditional academic values by the guardians of higher learning themselves.