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From liberal finance inconsistency to relevant systemic regulation : an institutionalist analysis

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  • Faruk Ülgen

    (CREG - Centre de recherche en économie de Grenoble - UPMF - Université Pierre Mendès France - Grenoble 2)

Abstract

This article suggests an institutionalist analysis of monetary capitalism and points to the inconsistency of liberal regulation mechanisms. It leans on the characteristics of money in a capitalist economy, often ignored by the consensual wisdom but explicitly studied by institutionalist approaches as major concerns in economic evolution. The article then shows, in a Minskyian vein, the weaknesses and irrelevance of liberal financial structures with regard to the prerequisites of sustainable macroeconomic stability. The main implication is that macro-prudential regulatory reforms must be designed and implemented to tame speculative finance. Therefore, market-based self-regulation mechanisms must be replaced by public regulation processes that could be framed on two rules: preventive-constrained finance and preventive-binding funding.

Suggested Citation

  • Faruk Ülgen, 2015. "From liberal finance inconsistency to relevant systemic regulation : an institutionalist analysis," Post-Print halshs-01166696, HAL.
    • Handle: RePEc:hal:journl:halshs-01166696
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01166696
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    References listed on IDEAS

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    Keywords

    financial liberalization; systemic crisis; institutional analysis; regulation;
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