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The Impact of the 2007-2010 Crisis on the Geography of Finance

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Listed:
  • Gunther Capelle-Blancard
  • Yamina Tadjeddine

Abstract

The location of financial activities is traditionally characterized by a great deal of inertia. However, the 2007-10 crisis may considerably modify the geography of finance and cause an upheaval in world hierarchy. The crisis hit the Western countries directly and the main financial centers have been massively losing jobs, especially London and New York. Moreover, in Western countries, the financial industry is on the way to lose the support implicitly provided by governments until the crisis. Indeed, while finance was considered as a first-class position in the international division of labor, the crisis has clearly shown the threats associated with an excessive growth of the financial industry (vulnerability to external shocks, rising of inequalities, etc.). Hence, even within the traditional bastions of finance it is claimed that the financial industry needs to get smaller. At the same time, stock markets in Shanghai, Hong-Kong and Bombay are upstaging them as major players.

Suggested Citation

  • Gunther Capelle-Blancard & Yamina Tadjeddine, 2010. "The Impact of the 2007-2010 Crisis on the Geography of Finance," Working Papers 2010-16, CEPII research center.
    • Handle: RePEc:cii:cepidt:2010-16
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    File URL: http://www.cepii.fr/PDF_PUB/wp/2010/wp2010-16.pdf
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    References listed on IDEAS

    as
    1. Claudia Goldin & Lawrence F. Katz, 2008. "Transitions: Career and Family Life Cycles of the Educational Elite," American Economic Review, American Economic Association, vol. 98(2), pages 363-369, May.
    2. Brian Bell & John Van Reenen, 2010. "Bankers' Pay and Extreme Wage Inequality in the UK," CEP Reports 21, Centre for Economic Performance, LSE.
    3. Gunther Capelle-Blancard & Matthieu Crozet & Fabien Tripier, 2007. "La localisation des activités financières dans l'Union européenne," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00758384, HAL.
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    More about this item

    Keywords

    Financial Geography; International Financial Centers; Globalization; Financial Crisis; Subprime;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G2 - Financial Economics - - Financial Institutions and Services
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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