IDEAS home Printed from https://ideas.repec.org/p/hal/journl/halshs-01344502.html
   My bibliography  Save this paper

Financial liberalization as a process of flawed institutional change

Author

Listed:
  • Faruk Ülgen

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

Abstract

I argue that the financial liberalization of the last decades, which resulted in a worldwide crisis, relied on an institutional change that ill-shaped actors’ behavior so as to let them enter into unsustainable speculative activities at the expense of macro-stability. To support such an assertion, I draw upon a specific Veblen-Minsky approach to a credit-money economy and its endogenous fragilities. I also maintain that, when financial markets are liberalized and private-interests related self-regulation replaces public macro-prudential supervision, the financial system undergoes institutional deadlock and the ensuing confusion is transformed into a market gridlock. Markets then become unable to recover without public rescue operations of banks. The subsequent negative economic and social consequences are beyond the limits of any acceptable liberal ideology and scientific understanding. Therefore, systemic stability calls for a tighter macro-regulatory framework to remove the domination of speculative finance over economic decisions and activities.

Suggested Citation

  • Faruk Ülgen, 2016. "Financial liberalization as a process of flawed institutional change," Post-Print halshs-01344502, HAL.
  • Handle: RePEc:hal:journl:halshs-01344502
    DOI: 10.1080/00213624.2016.1179055
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01344502
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:halshs-01344502. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.