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Financialization

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Financialization (or financialisation in <a href="British_English" title="British English">British English</a>) is a term sometimes used to describe the development of <a href="Financial_capitalism" class="mw-redirect" title="Financial capitalism">financial capitalism</a> during the period from 1980 to the present, in which <a href="Financial_leverage" class="mw-redirect" title="Financial leverage">debt-to-equity ratios</a> increased, and <a href="Financial_markets" class="mw-redirect" title="Financial markets">financial services</a> accounted for an increasing share of <a href="National_income" class="mw-redirect" title="National income">national income</a> relative to other sectors.

Financialization describes an economic process by which exchange is facilitated through the intermediation of <a href="Financial_instrument" title="Financial instrument">financial instruments.</a> Financialization may permit <a href="Real_Goods" title="Real Goods">real goods</a>, <a href="Financial_services" title="Financial services">services</a>, and risks to be readily exchangeable for <a href="Currency" title="Currency">currency</a>, and thus make it easier for people to <a href="Rationalization_(economics)" title="Rationalization (economics)">rationalize</a> their assets and income flows.

Financialization is tied to the transition from an industrial economy to a <a href="Service_economy" title="Service economy">service economy</a>, as financial services belong to the <a href="Tertiary_sector_of_the_economy" title="Tertiary sector of the economy">tertiary sector of the economy</a>.

<div class="mw-heading mw-heading2"><h2 id="Specific_academic_approaches">Specific academic approaches</h2></div>

Various definitions, focusing on specific aspects and interpretations, have been used:

<ul><li>Greta Krippner of the <a href="University_of_Michigan" title="University of Michigan">University of Michigan</a> writes that financialization refers to a "pattern of <a href="Capital_accumulation" title="Capital accumulation">accumulation</a> in which <a href="Profit_(accounting)" title="Profit (accounting)">profit</a> making occurs increasingly through financial channels rather than through trade and <a href="Production_(economics)" title="Production (economics)">commodity production</a>."<a href="#cite_note-2">[2]</a> In the introduction to the 2005 book Financialization and the World Economy, editor Gerald A. Epstein wrote that some scholars have insisted on a much narrower use of the term: the ascendancy of <a href="Shareholder_value" title="Shareholder value">shareholder value</a> as a mode of <a href="Corporate_governance" title="Corporate governance">corporate governance</a>, or the growing dominance of <a href="Capital_market" title="Capital market">capital market</a> financial systems over bank-based financial systems. Pierre-Yves Gomez and Harry Korine, in their 2008 book Entrepreneurs and Democracy: A Political Theory of Corporate Governance, have identified a long-term trend in the evolution of corporate governance of large corporations and have shown that financialization is one step in this process.</li>

<li>Thomas Marois, looking at the big emerging markets, defines "emerging finance capitalism" as the current phase of accumulation, characterized by "the fusion of the interests of domestic and foreign financial capital in the state apparatus as the institutionalized priorities and overarching social logic guiding the actions of state managers and government elites, often to the detriment of labor."<a href="#cite_note-3">[3]</a></li>

<li>According to <a href="Gerald_Epstein" title="Gerald Epstein">Gerald A. Epstein</a>, "Financialization refers to the increasing importance of financial markets, financial motives, financial institutions, and financial elites in the operation of the economy and its governing institutions, both at the national and international levels."<a href="#cite_note-4">[4]</a></li>

<li><a href="Marxian_economics" title="Marxian economics">Marxian Economist</a> Elliot Goodell Ugalde defines financialization as the creation of <a href="Fictitious_capital" title="Fictitious capital">fictitious capital</a> through the growing divergence between the <a href="Exchange_value" title="Exchange value">exchange value</a> and the real market price of assets, particularly housing. This process inflates asset values beyond their basis in <a href="Socially_necessary_labour_time" title="Socially necessary labour time">socially necessary labor</a>, transforming them into speculative instruments rather than goods fulfilling essential needs. The result is a distortion where market prices are driven by profit-seeking behavior rather than the actual utility or accessibility of the asset, exacerbating inequality and undermining the stability of the broader economic system.<a href="#cite_note-5">[5]</a></li>

<li>Financialization may be defined as "the increasing dominance of the finance industry in the sum total of economic activity, of financial controllers in the management of corporations, of financial assets among total assets, of marketized securities and particularly equities among financial assets, of the stock market as a market for corporate control in determining corporate strategies, and of fluctuations in the stock market as a determinant of business cycles" (Dore 2002).</li>

<li>More popularly, however, financialization is understood to mean the vastly expanded role of financial motives, financial markets, financial actors, and <a href="Financial_institution" title="Financial institution">financial institutions</a> in the operation of domestic and international economies.</li>

<li>Sociological and political interpretations have also been made. In his 2006 book, <a href="American_Theocracy%3A_The_Peril_and_Politics_of_Radical_Religion%2C_Oil%2C_and_Borrowed_Money_in_the_21st_Century" class="mw-redirect" title="American Theocracy: The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century">American Theocracy: The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century</a>, American writer and commentator <a href="Kevin_Phillips_(political_commentator)" title="Kevin Phillips (political commentator)">Kevin Phillips</a> presents financialization as "a process whereby financial services, broadly construed, take over the dominant economic, cultural, and political role in a national economy" (268). Phillips considers that the financialization of the US economy follows the same pattern that marked the beginning of the decline of <a href="Habsburg_Spain" title="Habsburg Spain">Habsburg Spain</a> in the 16th century, the <a href="Dutch_trading_empire" class="mw-redirect" title="Dutch trading empire">Dutch trading empire</a> in the 18th century, and the <a href="British_Empire" title="British Empire">British Empire</a> in the 19th century (it is also worth pointing out that the true final step in each of these historical economies was <a href="Economic_collapse" title="Economic collapse">collapse</a>):</li></ul>

<dl><dd><dl><dd>... the leading <a href="Economic_power" title="Economic power">economic powers</a> have followed an evolutionary progression: first, agriculture, fishing, and the like, next commerce and industry, and finally, finance. Several historians have elaborated on this point. Brooks Adams contended that "as societies consolidate, they pass through a profound intellectual change. Energy ceases to vent through the imagination and takes the form of capital."</dd></dl></dd></dl>

Jean Cushen explores how the workplace outcomes associated with financialization render employees insecure and angry.<a href="#cite_note-6">[6]</a>

<div class="mw-heading mw-heading2"><h2 id="Roots">Roots</h2></div>

In the American experience, increased financialization occurred concomitant with the rise of <a href="Neoliberalism" title="Neoliberalism">neoliberalism</a> and the <a href="Free_market" title="Free market">free-market doctrines</a> of <a href="Milton_Friedman" title="Milton Friedman">Milton Friedman</a> and the <a href="Chicago_School_of_Economics" class="mw-redirect" title="Chicago School of Economics">Chicago School of Economics</a> in the late twentieth century. Various academic economists of that period worked out ideological and theoretical rationalizations and analytical approaches to facilitate the increased <a href="Deregulation" title="Deregulation">deregulation</a> of financial systems and banking.

In a 1998 article, <a href="Michael_Hudson_(economist)" title="Michael Hudson (economist)">Michael Hudson</a> discussed previous economists who saw the problems that resulted from financialization.<a href="#cite_note-7">[7]</a> Problems were identified by <a href="John_A._Hobson" class="mw-redirect" title="John A. Hobson">John A. Hobson</a> (financialization enabled Britain's imperialism), <a href="Thorstein_Veblen" title="Thorstein Veblen">Thorstein Veblen</a> (it acts in opposition to rational engineers), <a href="Herbert_Somerton_Foxwell" class="mw-redirect" title="Herbert Somerton Foxwell">Herbert Somerton Foxwell</a> (Britain was not using finance for industry as well as Europe), and <a href="Rudolf_Hilferding" title="Rudolf Hilferding">Rudolf Hilferding</a> (Germany was surpassing Britain and the United States in banking that supports industry).

At the same 1998 conference in Oslo, <a href="Erik_S._Reinert" title="Erik S. Reinert">Erik S. Reinert</a> and Arno Mong Daastøl in "Production Capitalism vs. Financial Capitalism" provided an extensive bibliography on past writings, and prophetically asked<a href="#cite_note-8">[8]</a>

<blockquote>In the United States, probably more money has been made through the appreciation of real estate than in any other way. What are the long-term consequences if an increasing percentage of savings and wealth, as it now seems, is used to inflate the prices of already existing assets - real estate and stocks - instead of creating new production and innovation? </blockquote>

<div class="mw-heading mw-heading2"><h2 id="Financial_turnover_compared_to_gross_domestic_product">Financial turnover compared to gross domestic product</h2></div>

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Other financial markets exhibited similarly explosive growth. Trading in US equity (stock) markets grew from $136.0 billion (or 13.1% of US GDP) in 1970 to $1.671 trillion (or 28.8% of U.S. GDP) in 1990. In 2000, trading in US equity markets was $14.222 trillion (144.9% of GDP). Most of the growth in stock trading has been directly attributed to the introduction and spread of <a href="Program_trading" title="Program trading">program trading</a>.

According to the <a rel="nofollow" class="external text" href="http://www.bis.org/publ/qtrpdf/r_qt0703b.pdf">March 2007 Quarterly Report from the Bank for International Settlements</a>, page 24:

<blockquote>Trading on the international derivatives exchanges slowed in the fourth quarter of 2006. The combined turnover of interest rate, currency, and stock index derivatives fell by 7% to $431 trillion between October and December 2006. </blockquote>

Thus, derivatives trading—mostly <a href="Futures_contract" title="Futures contract">futures contracts</a> on interest rates, foreign currencies, <a href="United_States_Treasury_security" title="United States Treasury security">Treasury bonds</a>, and the like—had reached a level of $1,200 trillion, or $1.2 quadrillion, a year. By comparison, the US GDP in 2006 was $12.456 trillion.

<div class="mw-heading mw-heading2"><h2 id="Futures_markets">Futures markets</h2></div>

The data for turnover in the futures markets in 1970, 1980, and 1990 is based on the number of contracts traded, which is reported by the organized exchanges, such as the <a href="Chicago_Board_of_Trade" title="Chicago Board of Trade">Chicago Board of Trade</a>, the <a href="Chicago_Mercantile_Exchange" title="Chicago Mercantile Exchange">Chicago Mercantile Exchange</a>, and the <a href="New_York_Mercantile_Exchange" title="New York Mercantile Exchange">New York Commodity Exchange</a>, and compiled in data appendices of the Annual Reports of the U.S. Commodity Futures Trading Commission. The pie charts below show the dramatic shift in the types of futures contracts traded from 1970 to 2004.

For a century after organized futures exchanges were founded in the mid-19th century, all <a href="Futures_trading" class="mw-redirect" title="Futures trading">futures trading</a> was solely based on agricultural commodities. However, after the end of the gold-backed fixed-exchange-rate system in 1971, contracts based on foreign currencies began to be traded. After the deregulation of interest rates by the Bank of England and then the <a href="Federal_Reserve" title="Federal Reserve">US Federal Reserve</a> in the late 1970s, futures contracts based on various bonds and interest rates began to be traded. The result was that financial futures contracts—based on such things as interest rates, currencies, or equity indices—came to dominate the futures markets.

The dollar value of turnover in the futures markets is found by multiplying the number of contracts traded by the average value per contract for 1978 to 1980, which was calculated in research by the American Council of Life Insurers (ACLI) in 1981. The figures for earlier years were estimated on the computer-generated exponential fit of data from 1960 to 1970, with 1960 set at $165 billion, half the 1970 figure, based on a graph accompanying the ACLI data, which showed that the number of futures contracts traded in 1961 and earlier years was about half the number traded in 1970.

According to the ALCI data, the average value of interest-rate contracts is around ten times that of agricultural and other commodities, while the average value of currency contracts is twice that of agricultural and other commodities. (Beginning in mid-1993, the Chicago Mercantile Exchange itself began to release figures of the nominal value of contracts traded at the CME each month. In November 1993, the CME boasted that it had set a new monthly record of 13.466 million contracts traded, representing a dollar value of $8.8 trillion. By late 1994, this monthly value had doubled. On January 3, 1995, the CME boasted that its total volume for 1994 had jumped by 54% to 226.3 million contracts traded, worth nearly $200 trillion. Soon thereafter, the CME ceased to provide a figure for the dollar value of contracts traded.)

Futures contracts are "contracts to buy or sell a very common homogeneous item at a future date for a specific price." The nominal value of a futures contract is wildly different from the risk involved in engaging in that contract. Consider two parties who engage in a contract to exchange 5,000 bushels of wheat at $8.89 per bushel on December 17, 2012. The nominal value of the contract would be $44,450 (5,000 bushels x $8.89). But what is the risk? For the buyer, the risk is that the seller will not be able to deliver the wheat on the stated date. This means the buyer must purchase the wheat from someone else; this is known as the "<a href="Spot_market" title="Spot market">spot market</a>." Assume that the spot price for wheat on December 17, 2012, is $10 per bushel. This means the cost of purchasing the wheat is $50,000 (5,000 bushels x $10). So, the buyer would have lost $5,550 ($50,000 less $44,450), or the difference in the cost between the contract price and the spot price. Furthermore, futures are traded via exchanges, which guarantee that if one party reneges on its end of the bargain, (1) that party is blacklisted from entering into such contracts in the future, and (2) the injured party is insured against the loss by the exchange. If the loss is so large that the exchange cannot cover it, then the members of the exchange make up the loss. Another mitigating factor to consider is that a commonly traded liquid asset, such as gold, wheat, or the S&P 500 stock index, is extremely unlikely to have a future value of $0; thus, the counter-party risk is limited to something substantially less than the nominal value.

<div class="mw-heading mw-heading2"><h2 id="Accelerated_growth_of_the_finance_sector">Accelerated growth of the finance sector</h2></div>

The financial sector is a key industry in developed economies, in which it represents a sizable share of the <a href="GDP" class="mw-redirect" title="GDP">GDP</a> and an important source of employment. <a href="Financial_services" title="Financial services">Financial services</a> (<a href="Bank" title="Bank">banking</a>, <a href="Insurance" title="Insurance">insurance</a>, investment, etc.) have been for a long time a powerful sector of the economy in many economically developed countries. Those activities have also played a key role in facilitating <a href="Economic_globalization" title="Economic globalization">economic globalization</a>.

<div class="mw-heading mw-heading3"><h3 id="Early_20th_century_history_in_the_United_States">Early 20th century history in the United States</h3></div>

As early as the beginning of the 20th Century, a small number of financial sector firms have controlled the lion's share of wealth and power of the financial sector. The notion of an American "financial oligarchy" was discussed as early as 1913. In an article entitled "Our Financial Oligarchy," <a href="Louis_Brandeis" title="Louis Brandeis">Louis Brandeis</a>, who in 1913 was appointed to the <a href="United_States_Supreme_Court" class="mw-redirect" title="United States Supreme Court">United States Supreme Court</a>, wrote that, "We believe that no methods of regulation ever have been or can be devised to remove the menace inherent in private monopoly and overwhelming commercial power" that is vested in U.S. finance sector firms.<a href="#cite_note-FOOTNOTEJohnsonKwak201028–29-9">[9]</a> There were early investigations of the concentration of the economic power of the U.S. finance sector, such as the <a href="Pujo_Committee" title="Pujo Committee">Pujo Committee</a> of the <a href="U.S._House_of_Representatives" class="mw-redirect" title="U.S. House of Representatives">U.S. House of Representatives</a>, which in 1912 found that control of credit in America was concentrated in the hands of a small group of Wall Street firms that were using their positions to accumulate vast economic power.<a href="#cite_note-FOOTNOTEJohnsonKwak201028-10">[10]</a> When in 1911 <a href="Standard_Oil" class="mw-redirect" title="Standard Oil">Standard Oil</a> was broken up as an illegal monopoly by the U.S. government, the concentration of power in the U.S. financial sector was unaltered.<a href="#cite_note-FOOTNOTEJohnsonKwak201026-11">[11]</a>

Key players of financial sector firms also had a seat at the table in devising the Central Bank of the United States. In November 1910, the five heads of the country's most powerful finance sector firms gathered for a secret meeting on <a href="Jekyll_Island" title="Jekyll Island">Jekyll Island</a> with U.S. Senator <a href="Nelson_W._Aldrich" title="Nelson W. Aldrich">Nelson W. Aldrich</a> and Assistant Secretary of the <a href="U.S._Treasury_Department" class="mw-redirect" title="U.S. Treasury Department">U.S. Treasury Department</a> <a href="A._Piatt_Andrew" title="A. Piatt Andrew">A. Piatt Andrew</a> and laid the plans for the U.S. <a href="Federal_Reserve_System" class="mw-redirect" title="Federal Reserve System">Federal Reserve System</a>.<a href="#cite_note-FOOTNOTEJohnsonKwak201027-12">[12]</a>

<div class="mw-heading mw-heading3"><h3 id="Deregulation_and_accelerated_growth">Deregulation and accelerated growth</h3></div>

In the 1970s, the financial sector comprised slightly more than 3% of total <a href="Gross_Domestic_Product" class="mw-redirect" title="Gross Domestic Product">Gross Domestic Product</a> (GDP) of the U.S. economy,<a href="#cite_note-FOOTNOTEJohnsonKwak201061-13">[13]</a> while total financial assets of all investment banks (that is, securities broker-dealers) made up less than 2% of U.S. GDP.<a href="#cite_note-FOOTNOTEJohnsonKwak201063-14">[14]</a> The period from the <a href="New_Deal" title="New Deal">New Deal</a> through the 1970s has been referred to as the era of "boring banking" because banks that took deposits and made loans to individuals were prohibited from engaging in investments involving creative <a href="Financial_engineering" title="Financial engineering">financial engineering</a> and <a href="Investment_banking" title="Investment banking">investment banking</a>.<a href="#cite_note-FOOTNOTEJohnsonKwak201060–63-15">[15]</a>

U.S. federal deregulation in the 1980s of many types of banking practices paved the way for the rapid growth in the size, profitability, and political power of the financial sector. Such financial sector practices included creating private <a href="Mortgage-backed_securities" class="mw-redirect" title="Mortgage-backed securities">mortgage-backed securities</a>,<a href="#cite_note-FOOTNOTEJohnsonKwak201076-16">[16]</a> and more speculative approaches to creating and trading <a href="Derivative_(finance)" title="Derivative (finance)">derivatives</a> based on new quantitative models of risk and value.<a href="#cite_note-FOOTNOTEJohnsonKwak201078–81-17">[17]</a> Wall Street ramped up pressure on the <a href="United_States_Congress" title="United States Congress">United States Congress</a> for more deregulation, including for the repeal of <a href="Glass-Steagall" class="mw-redirect" title="Glass-Steagall">Glass-Steagall</a>, a New Deal law that, among other things, prohibits a bank that accepts deposits from functioning as an investment bank since the latter entails greater risks.<a href="#cite_note-FOOTNOTEJohnsonKwak201082–83,_95-18">[18]</a>

As a result of this rapid financialization, the financial sector scaled up vastly in the span of a few decades. In 1978, the financial sector comprised 3.5% of the American economy (that is, it made up 3.5% of U.S. GDP), but by 2007 it had reached 5.9%. Profits in the American financial sector in 2009 were six times higher on average than in 1980, compared with non-financial sector profits, which on average were just over twice what they were in 1980. Financial sector profits grew by 800%, adjusted for inflation, from 1980 to 2005. In comparison with the rest of the economy, U.S. nonfinancial sector profits grew by 250% during the same period. For context, financial sector profits from the 1930s until 1980 grew at the same rate as the rest of the American economy.<a href="#cite_note-FOOTNOTEJohnsonKwak201060-19">[19]</a>

By way of illustration of the increased power of the financial sector over the economy, in 1978, commercial banks held $1.2 trillion (million million) in assets, which is equivalent to 53% of the GDP of the United States. By year's end 2007, commercial banks held $11.8 trillion in assets, which is equivalent to 84% of U.S. GDP. Investment banks (securities broker-dealers) held $33 billion (thousand million) in assets in 1978 (equivalent to 1.3% of U.S. GDP), but held $3.1 trillion in assets (equivalent to 22% U.S. GDP) in 2007. The securities that were so instrumental in triggering the <a href="2008_financial_crisis" title="2008 financial crisis">2008 financial crisis</a>, asset-backed securities, including <a href="Collateralized_debt_obligations" class="mw-redirect" title="Collateralized debt obligations">collateralized debt obligations</a> (CDOs) were practically non-existent in 1978. By 2007, they comprised $4.5 trillion in assets, equivalent to 32% of the U.S. GDP.<a href="#cite_note-FOOTNOTEJohnsonKwak201059-20">[20]</a>

<div class="mw-heading mw-heading2"><h2 id="The_development_of_leverage_and_financial_derivatives">The development of leverage and financial derivatives</h2></div>

One of the most notable features of financialization has been the development of <a href="Leverage_(finance)" title="Leverage (finance)">overleverage</a> (more borrowed capital and less own capital) and, as a related tool, <a href="Financial_derivatives" class="mw-redirect" title="Financial derivatives">financial derivatives</a>: financial instruments, the price or value of which is derived from the price or value of another, underlying financial instrument. Those instruments, whose initial purpose was hedging and risk management, have become widely traded financial assets in their own right. The most common types of derivatives are futures contracts, swaps, and options. In the early 1990s, a number of central banks around the world began to survey the amount of derivative market activity and report the results to the <a href="Bank_for_International_Settlements" title="Bank for International Settlements">Bank for International Settlements</a>.<a href="#cite_note-21">[21]</a>

The number and types of financial derivatives have grown enormously. In November 2007, commenting on the <a href="2008_financial_crisis" title="2008 financial crisis">2008 financial crisis</a> and the <a href="Subprime_mortgage_crisis" title="Subprime mortgage crisis">subprime mortgage crisis</a>, Doug Noland's Credit Bubble Bulletin, on Asia Times Online, noted,

The scale of the Credit "insurance" problem is astounding. According to the Bank of International Settlements, the OTC market for Credit default swaps (CDS) jumped from $4.7 TN at the end of 2004 to $22.6 TN to end 2006. From the <a href="International_Swaps_and_Derivatives_Association" title="International Swaps and Derivatives Association">International Swaps and Derivatives Association</a> we know that the total notional volume of <a href="Credit_derivative" title="Credit derivative">credit derivatives</a> jumped about 30% during the first half to $45.5 TN. And from the <a href="Office_of_the_Comptroller_of_the_Currency" title="Office of the Comptroller of the Currency">Comptroller of the Currency</a>, total U.S. commercial bank Credit derivative positions ballooned from $492bn to begin 2003 to $11.8 TN as of this past June....<a rel="nofollow" class="external autonumber" href="https://www.occ.gov/publications-and-resources/publications/quarterly-report-on-bank-trading-and-derivatives-activities/files/q1-2003-derivatives-quarterly.html">[1]</a>

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A major unknown regarding derivatives is the actual amount of cash behind a transaction. A derivatives contract with a notional value of millions of dollars may actually only cost a few thousand dollars. For example, an <a href="Interest_rate_swap" title="Interest rate swap">interest rate swap</a> might be based on exchanging the interest payments on $100 million in US Treasury bonds at a fixed interest of 4.5%, for the floating interest rate of $100 million in credit card receivables. This contract would involve at least $4.5 million in interest payments, though the notional value may be reported as $100 million. However, the actual "cost" of the swap contract would be some small fraction of the minimal $4.5 million in interest payments. The difficulty of determining exactly how much this swap contract is worth, when accounted for on a financial institution's books, is typical of the worries of many experts and regulators over the explosive growth of these types of instruments.

Contrary to common belief in the United States, the largest financial center for derivatives (and for foreign exchange) is London. According to <a rel="nofollow" class="external text" href="https://web.archive.org/web/20080123203038/http://www.marketwatch.com/news/story/global-financing-race-new-york/story.aspx?guid=%7B5967C688-8AEB-4279-9704-F5CF3B45C653%7D&print=true&dist=printTop">MarketWatch on December 7, 2006</a>,

The global <a href="Foreign_exchange_market" title="Foreign exchange market">foreign exchange market</a>, easily the largest financial market, is dominated by London. More than half of the trades in the derivatives market are handled in London, which straddles the time zones between Asia and the U.S. And the trading rooms in the Square Mile, as the City of London financial district is known, are responsible for almost three-quarters of the trades in the secondary fixed-income markets.

</blockquote>

<div class="mw-heading mw-heading2"><h2 id="Effects_on_the_economy">Effects on the economy</h2></div>

During the <a href="2008_financial_crisis" title="2008 financial crisis">2008 financial crisis</a>, several economists and others began to argue that <a href="Financial_services" title="Financial services">financial services</a> had become too large a sector of the US economy, with no real benefit to society accruing from the activities of increased financialization.<a href="#cite_note-22">[22]</a>

In February 2009, white-collar criminologist and former senior financial regulator <a href="William_K._Black" title="William K. Black">William K. Black</a> listed the ways in which the financial sector harms the real economy. Black wrote, "The financial sector functions as the sharp canines that the predator state uses to rend the nation. In addition to siphoning off capital for its own benefit, the finance sector misallocates the remaining capital in ways that harm the real economy in order to reward already-rich financial elites harming the nation."<a href="#cite_note-23">[23]</a>

<a href="Emerging_country" class="mw-redirect" title="Emerging country">Emerging countries</a> have also tried to develop their financial sector, as an engine of <a href="Economic_development" title="Economic development">economic development</a>. A typical aspect is the growth of <a href="Microfinance" title="Microfinance">microfinance</a> or <a href="Microcredit" title="Microcredit">microcredit</a>, as part of <a href="Financial_inclusion" title="Financial inclusion">financial inclusion</a>.<a href="#cite_note-24">[24]</a>

<a href="Bruce_Bartlett" title="Bruce Bartlett">Bruce Bartlett</a> summarized several studies in a 2013 article indicating that financialization has adversely affected economic growth and contributes to <a href="Income_inequality" class="mw-redirect" title="Income inequality">income inequality</a> and <a href="Wage_stagnation" class="mw-redirect" title="Wage stagnation">wage stagnation</a> for the middle class.<a href="#cite_note-25">[25]</a>

<div class="mw-heading mw-heading3"><h3 id="Cause_of_financial_crises">Cause of financial crises</h3></div>

On 15 February 2010, <a href="Adair_Turner" class="mw-redirect" title="Adair Turner">Adair Turner</a>, the head of Britain's <a href="Financial_Services_Authority" title="Financial Services Authority">Financial Services Authority</a>, said financialization was correlated with the <a href="2008_financial_crisis" title="2008 financial crisis">2008 financial crisis</a>. In a speech before the <a href="Reserve_Bank_of_India" title="Reserve Bank of India">Reserve Bank of India</a>, Turner said that the <a href="1997_Asian_financial_crisis" title="1997 Asian financial crisis">1997 Asian financial crisis</a> was similar to the <a href="2008_financial_crisis" title="2008 financial crisis">2008 financial crisis</a> in that "both were rooted in, or at least followed after, sustained increases in the relative importance of financial activity relative to real non-financial economic activity, an increasing 'financialisation' of the economy."<a href="#cite_note-26">[26]</a>

<div class="mw-heading mw-heading2"><h2 id="Effects_on_political_system">Effects on political system</h2></div>

Some, such as former <a href="International_Monetary_Fund" title="International Monetary Fund">International Monetary Fund</a> chief economist <a href="Simon_Johnson_(economist)" title="Simon Johnson (economist)">Simon Johnson</a>, have argued that the increased power and influence of the financial services sector had fundamentally transformed American politics, endangering representative democracy itself through undue influence on the political system and <a href="Regulatory_capture" title="Regulatory capture">regulatory capture</a> by the financial <a href="Oligarchy" title="Oligarchy">oligarchy</a>.<a href="#cite_note-27">[27]</a>

In the 1990s vast monetary resources flowing to a few "megabanks," enabled the financial oligarchy to achieve greater political power in the United States. Wall Street firms largely succeeded in getting the American political system and regulators to accept the ideology of financial <a href="Deregulation" title="Deregulation">deregulation</a> and the legalization of more novel financial instruments.<a href="#cite_note-FOOTNOTEJohnsonKwak201089-28">[28]</a> Political power was achieved by <a href="Campaign_finance" title="Campaign finance">contributions to political campaigns</a>, by financial industry <a href="Lobbying_in_the_United_States" title="Lobbying in the United States">lobbying</a>, and through a <a href="Revolving_door_(politics)" title="Revolving door (politics)">revolving door</a> that positioned financial industry leaders in key politically appointed policy making and regulatory roles and that rewarded sympathetic senior government officials with super high-paying Wall Street jobs after their government service.<a href="#cite_note-FOOTNOTEJohnsonKwak201090-29">[29]</a> The financial sector was the leading contributor to political campaigns since at least the 1990s, contributing more than $150 million in 2006. (This far exceeded the second largest political contributing industry, the healthcare industry, which contributed $100 million in 2006.) From 1990 to 2006, the securities and investment industry increased its political contributions six-fold, from an annual $12 to $72 million. The financial sector contributed $1.7 billion to political campaigns from 1998 to 2006, and spent an additional $3.4 billion on political lobbying, according to one estimate.<a href="#cite_note-FOOTNOTEJohnsonKwak201091-30">[30]</a>

Policy makers such as <a href="Chairman_of_the_Federal_Reserve" class="mw-redirect" title="Chairman of the Federal Reserve">Chairman of the Federal Reserve</a> <a href="Alan_Greenspan" title="Alan Greenspan">Alan Greenspan</a> called for <a href="Industry_self-regulation" title="Industry self-regulation">self-regulation</a>.

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<ul><li><a href="2008_financial_crisis" title="2008 financial crisis">2008 financial crisis</a></li>

<li><a href="Capital_control" title="Capital control">Capital control</a></li>

<li><a href="Derivative_(finance)" title="Derivative (finance)">Derivative (finance)</a></li>

<li><a href="Economic_rent" title="Economic rent">Economic rent</a></li>

<li><a href="Economic_sociology" title="Economic sociology">Economic sociology</a></li>

<li><a href="Enshittification" title="Enshittification">Enshittification</a></li>

<li><a href="Financial_capital" title="Financial capital">Financial capital</a></li>

<li><a href="Financial_economics" title="Financial economics">Financial economics</a></li>

<li><a href="FIRE_economy" title="FIRE economy">FIRE economy</a></li>

<li><a href="Foreign_exchange_trading" class="mw-redirect" title="Foreign exchange trading">Foreign exchange trading</a></li>

<li><a href="Late_capitalism" class="mw-redirect" title="Late capitalism">Late capitalism</a></li>

<li><a href="Neoliberalism" title="Neoliberalism">Neoliberalism</a></li>

<li><a href="Shadow_banking_system" title="Shadow banking system">Shadow banking system</a></li>

<li><a href="Tech_bubble" class="mw-redirect" title="Tech bubble">Tech bubble</a></li></ul>

</div>

<div class="mw-heading mw-heading2"><h2 id="Notes">Notes</h2></div>

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<li id="cite_note-1"><a href="#cite_ref-1">^</a> Thomas Philippon (Finance Department of the New York University Stern of Business at <a href="New_York_University" title="New York University">New York University</a>). <a rel="nofollow" class="external text" href="https://web.archive.org/web/20141117103959/http://w4.stern.nyu.edu/blogs/sternonfinance/2008/11/the-future-of-the-financial-in.html">The future of the financial industry</a>. Stern on Finance, November 6, 2008.

</li>

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</style><cite id="CITEREFKrippner2005" class="citation journal cs1">Krippner, G. R. (May 2005). "The financialization of the American economy". Socio-Economic Review. 3 (2): 173–208. <a href="Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.1093%2FSER%2Fmwi008">10.1093/SER/mwi008</a>.</cite>

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<li id="cite_note-3"><a href="#cite_ref-3">^</a> <cite id="CITEREFMarois2012" class="citation book cs1">Marois, Thomas (2012). States, Banks and Crisis: Emerging Finance Capitalism in Mexico and Turkey. Edward Elgar Publishing. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>978-0-85793-858-9</bdi>.</cite>

</li>

<li id="cite_note-4"><a href="#cite_ref-4">^</a> <cite id="CITEREFEpstein2019" class="citation book cs1">Epstein, Gerald (2019). "Financialization, rentier interests and central bank policy". The Political Economy of Central Banking. <a href="Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.4337%2F9781788978415.00024">10.4337/9781788978415.00024</a>. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>978-1-78897-841-5</bdi>.</cite>

</li>

<li id="cite_note-5"><a href="#cite_ref-5">^</a> Goodell Ugalde, Elliot. <a rel="nofollow" class="external text" href="https://ojs.library.ubc.ca/index.php/clogic/article/view/199490">“In Defence Of Marx’s Labour Theory Of Value: Vancouver’s Housing ‘Crisis.”</a> Cultural Logic: A Journal of Marxist Theory and Practice, 26 (2024): 69-101. University of British Columbia Press.

</li>

<li id="cite_note-6"><a href="#cite_ref-6">^</a> <cite id="CITEREFCushen2013" class="citation journal cs1">Cushen, Jean (May 2013). <a rel="nofollow" class="external text" href="http://mural.maynoothuniversity.ie/11236/1/JCush_Workplace_2013.pdf">"Financialization in the workplace: Hegemonic narratives, performative interventions and the angry knowledge worker"</a> (PDF). Accounting, Organizations and Society. 38 (4): 314–331. <a href="Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.1016%2Fj.aos.2013.06.001">10.1016/j.aos.2013.06.001</a>.</cite>

</li>

<li id="cite_note-7"><a href="#cite_ref-7">^</a> <cite id="CITEREFHudson1998" class="citation web cs1"><a href="Michael_Hudson_(economist)" title="Michael Hudson (economist)">Hudson, Michael</a> (September 1998). <a rel="nofollow" class="external text" href="http://michael-hudson.com/1998/09/financial-capitalism-v-industrial-capitalism/">"Financial Capitalism v. Industrial Capitalism (Contribution to The Other Canon Conference on Production Capitalism vs. Financial Capitalism Oslo, September 3-4, 1998 )"</a>. Retrieved March 12, 2009.</cite>

</li>

<li id="cite_note-8"><a href="#cite_ref-8">^</a> <cite id="CITEREFReinertDaastøl2011" class="citation report cs1"><a href="Erik_S._Reinert" title="Erik S. Reinert">Reinert, Erik S.</a>; Daastøl, Arno Mong (2011). <a rel="nofollow" class="external text" href="http://technologygovernance.eu/files/main/2012032710291818.pdf">Production Capitalism vs. Financial Capitalism – Symbiosis and Parasitism. An Evolutionary Perspective and Bibliography</a> (PDF) (Report).</cite> Working Papers in Technology Governance and Economic Dynamics no. 36. <a href="The_Other_Canon_Foundation" title="The Other Canon Foundation">The Other Canon Foundation</a>, <a href="Norway" title="Norway">Norway</a>. <a href="Tallinn_University_of_Technology" title="Tallinn University of Technology">Tallinn University of Technology</a>, Tallinn.

</li>

<li id="cite_note-FOOTNOTEJohnsonKwak201028–29-9"><a href="#cite_ref-FOOTNOTEJohnsonKwak201028–29_9-0">^</a> <a href="#CITEREFJohnsonKwak2010">Johnson & Kwak 2010</a>, pp. 28–29.

</li>

<li id="cite_note-FOOTNOTEJohnsonKwak201028-10"><a href="#cite_ref-FOOTNOTEJohnsonKwak201028_10-0">^</a> <a href="#CITEREFJohnsonKwak2010">Johnson & Kwak 2010</a>, p. 28.

</li>

<li id="cite_note-FOOTNOTEJohnsonKwak201026-11"><a href="#cite_ref-FOOTNOTEJohnsonKwak201026_11-0">^</a> <a href="#CITEREFJohnsonKwak2010">Johnson & Kwak 2010</a>, p. 26.

</li>

<li id="cite_note-FOOTNOTEJohnsonKwak201027-12"><a href="#cite_ref-FOOTNOTEJohnsonKwak201027_12-0">^</a> <a href="#CITEREFJohnsonKwak2010">Johnson & Kwak 2010</a>, p. 27.

</li>

<li id="cite_note-FOOTNOTEJohnsonKwak201061-13"><a href="#cite_ref-FOOTNOTEJohnsonKwak201061_13-0">^</a> <a href="#CITEREFJohnsonKwak2010">Johnson & Kwak 2010</a>, p. 61.

</li>

<li id="cite_note-FOOTNOTEJohnsonKwak201063-14"><a href="#cite_ref-FOOTNOTEJohnsonKwak201063_14-0">^</a> <a href="#CITEREFJohnsonKwak2010">Johnson & Kwak 2010</a>, p. 63.

</li>

<li id="cite_note-FOOTNOTEJohnsonKwak201060–63-15"><a href="#cite_ref-FOOTNOTEJohnsonKwak201060–63_15-0">^</a> <a href="#CITEREFJohnsonKwak2010">Johnson & Kwak 2010</a>, pp. 60–63.

</li>

<li id="cite_note-FOOTNOTEJohnsonKwak201076-16"><a href="#cite_ref-FOOTNOTEJohnsonKwak201076_16-0">^</a> <a href="#CITEREFJohnsonKwak2010">Johnson & Kwak 2010</a>, p. 76.

</li>

<li id="cite_note-FOOTNOTEJohnsonKwak201078–81-17"><a href="#cite_ref-FOOTNOTEJohnsonKwak201078–81_17-0">^</a> <a href="#CITEREFJohnsonKwak2010">Johnson & Kwak 2010</a>, pp. 78–81.

</li>

<li id="cite_note-FOOTNOTEJohnsonKwak201082–83,_95-18"><a href="#cite_ref-FOOTNOTEJohnsonKwak201082–83,_95_18-0">^</a> <a href="#CITEREFJohnsonKwak2010">Johnson & Kwak 2010</a>, pp. 82–83, 95.

</li>

<li id="cite_note-FOOTNOTEJohnsonKwak201060-19"><a href="#cite_ref-FOOTNOTEJohnsonKwak201060_19-0">^</a> <a href="#CITEREFJohnsonKwak2010">Johnson & Kwak 2010</a>, p. 60.

</li>

<li id="cite_note-FOOTNOTEJohnsonKwak201059-20"><a href="#cite_ref-FOOTNOTEJohnsonKwak201059_20-0">^</a> <a href="#CITEREFJohnsonKwak2010">Johnson & Kwak 2010</a>, p. 59.

</li>

<li id="cite_note-21"><a href="#cite_ref-21">^</a> <cite class="citation web cs1"><a rel="nofollow" class="external text" href="https://data.bis.org/topics/OTC_DER/data?sort=LAST_UPDATED-ASC">"OTC derivatives statistics - data | BIS Data Portal"</a>. data.bis.org. Retrieved February 15, 2025.</cite>

</li>

<li id="cite_note-22"><a href="#cite_ref-22">^</a> Megan McCardle. <a rel="nofollow" class="external text" href="https://www.theatlantic.com/doc/200905/imf-advice">The Quiet Coup</a>. <a href="The_Atlantic_Monthly" class="mw-redirect" title="The Atlantic Monthly">The Atlantic Monthly</a>, May 2009

</li>

<li id="cite_note-23"><a href="#cite_ref-23">^</a> <cite id="CITEREFBlack2010" class="citation news cs1">Black, William K. (March 18, 2010). <a rel="nofollow" class="external text" href="https://www.huffpost.com/entry/how-the-servant-became-a_b_318010">"How the Servant Became a Predator: Finance's Five Fatal Flaws"</a>. HuffPost.</cite>

</li>

<li id="cite_note-24"><a href="#cite_ref-24">^</a> <cite id="CITEREFMader2017" class="citation book cs1">Mader, Philip (2017). "Microfinance and Financial Inclusion". The Oxford Handbook of the Social Science of Poverty. pp. 843–865. <a href="Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.1093%2Foxfordhb%2F9780199914050.013.38">10.1093/oxfordhb/9780199914050.013.38</a>. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>978-0-19-991405-0</bdi>.</cite>

</li>

<li id="cite_note-25"><a href="#cite_ref-25">^</a> <cite id="CITEREFBartlett2013" class="citation news cs1">Bartlett, Bruce (June 11, 2013). <a rel="nofollow" class="external text" href="https://archive.nytimes.com/economix.blogs.nytimes.com/2013/06/11/financialization-as-a-cause-of-economic-malaise/">"'Financialization' as a Cause of Economic Malaise"</a>. Economix Blog.</cite>

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<li id="cite_note-26"><a href="#cite_ref-26">^</a> <a href="Reserve_Bank_of_India" title="Reserve Bank of India">Reserve Bank of India</a>. <a rel="nofollow" class="external text" href="https://www.rbi.org.in/scripts/BS_SpeechesView.aspx?Id=475">"After the Crises: Assessing the Costs and Benefits of Financial Liberalisation"</a>. Speech delivered by Lord Adair Turner, Chairman, Financial Services Authority, United Kingdom, at the Fourteenth C. D. Deshmukh Memorial Lecture on February 15, 2010 at Mumbai.

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<li id="cite_note-27"><a href="#cite_ref-27">^</a> Megan McCardle. <a rel="nofollow" class="external text" href="https://www.theatlantic.com/doc/200905/imf-advice">The Quiet Coup</a>. <a href="The_Atlantic_Monthly" class="mw-redirect" title="The Atlantic Monthly">The Atlantic Monthly</a>, May 2009

</li>

<li id="cite_note-FOOTNOTEJohnsonKwak201089-28"><a href="#cite_ref-FOOTNOTEJohnsonKwak201089_28-0">^</a> <a href="#CITEREFJohnsonKwak2010">Johnson & Kwak 2010</a>, p. 89.

</li>

<li id="cite_note-FOOTNOTEJohnsonKwak201090-29"><a href="#cite_ref-FOOTNOTEJohnsonKwak201090_29-0">^</a> <a href="#CITEREFJohnsonKwak2010">Johnson & Kwak 2010</a>, p. 90.

</li>

<li id="cite_note-FOOTNOTEJohnsonKwak201091-30"><a href="#cite_ref-FOOTNOTEJohnsonKwak201091_30-0">^</a> <a href="#CITEREFJohnsonKwak2010">Johnson & Kwak 2010</a>, p. 91.

</li>

</ol></div>

<div class="mw-heading mw-heading2"><h2 id="Sources">Sources</h2></div>

<ul><li><cite id="CITEREFJohnsonKwak2010" class="citation book cs1">Johnson, Simon; Kwak, James (2010). <a href="13_Bankers" title="13 Bankers">13 Bankers: The Wall Street Takeover and the Next Financial Meltdown</a>. Knopf Doubleday Publishing Group. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>978-0-307-37922-1</bdi>.</cite></li></ul>

<div class="mw-heading mw-heading2"><h2 id="Further_reading">Further reading</h2></div>

<ul><li><cite id="CITEREFBaker2005" class="citation conference cs1">Baker, A (2005). IPE, Corporate Governance and the New Politics of Financialisation: Issues Raised by Sarbanes-Oxley. British International Studies Association Annual Conference.</cite></li>

<li><cite id="CITEREFHeinDodigBudyldina2014" class="citation report cs1">Hein, Eckhard; Dodig, Nina; Budyldina, Natalia (2014). Financial, economic and social systems: French Regulation School, Social Structures of Accumulation and Post-Keynesian approaches compared (Report). <a href="Hdl_(identifier)" class="mw-redirect" title="Hdl (identifier)">hdl</a>:<a rel="nofollow" class="external text" href="https://hdl.handle.net/10419%2F92910">10419/92910</a>.</cite></li>

<li><cite id="CITEREFLavoie2012" class="citation journal cs1"><a href="Marc_Lavoie" title="Marc Lavoie">Lavoie, Marc</a> (2012). "Financialization, neo-liberalism, and securitization". Journal of Post Keynesian Economics. 35 (2): 215–233. <a href="Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.2753%2Fpke0160-3477350203">10.2753/pke0160-3477350203</a>. <a href="JSTOR_(identifier)" class="mw-redirect" title="JSTOR (identifier)">JSTOR</a> <a rel="nofollow" class="external text" href="https://www.jstor.org/stable/23469991">23469991</a>. <a href="S2CID_(identifier)" class="mw-redirect" title="S2CID (identifier)">S2CID</a> <a rel="nofollow" class="external text" href="https://api.semanticscholar.org/CorpusID:153927517">153927517</a>.</cite></li>

<li><cite id="CITEREFMartin2002" class="citation book cs1">Martin, Randy (2002). Financialization Of Daily Life. Temple University Press. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>978-1-4399-0597-5</bdi>.</cite></li>

<li><cite id="CITEREFOrhangazi2008" class="citation book cs1">Orhangazi, È (2008). Financialization and the US Economy. Edward Elgar Publishing. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>978-1-84844-016-6</bdi>.</cite></li>

<li><cite id="CITEREFOrhangazi2008" class="citation journal cs1">Orhangazi, O. (April 9, 2008). "Financialisation and capital accumulation in the non-financial corporate sector:: A theoretical and empirical investigation on the US economy: 1973-2003". Cambridge Journal of Economics. 32 (6): 863–886. <a href="Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.1093%2Fcje%2Fben009">10.1093/cje/ben009</a>.</cite></li>

<li><cite id="CITEREFGomezKorine2008" class="citation book cs1">Gomez, Pierre-Yves; Korine, Harry (2008). Entrepreneurs and Democracy: A Political Theory of Corporate Governance. Cambridge University Press. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>978-0-521-85638-6</bdi>.</cite></li>

<li><cite id="CITEREFMarois2012" class="citation book cs1">Marois, Thomas (2012). "Finance, finance capital and financialization". The Elgar Companion to Marxist Economics. <a href="Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.4337%2F9781781001226.00028">10.4337/9781781001226.00028</a>. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>978-1-78100-122-6</bdi>.</cite></li></ul>

<div class="mw-heading mw-heading2"><h2 id="External_links">External links</h2></div>

<ul><li><cite id="CITEREFBlackburn2008" class="citation journal cs1"><a href="Robin_Blackburn" title="Robin Blackburn">Blackburn, Robin</a> (March–April 2008). <a rel="nofollow" class="external text" href="https://newleftreview.org/II/50/robin-blackburn-the-subprime-crisis">"Subprime crisis"</a>. <a href="New_Left_Review" title="New Left Review">New Left Review</a>. 50. New Left Review.</cite></li>

<li><cite id="CITEREFBresser-Pereira2010" class="citation book cs1"><a href="Luiz_Carlos_Bresser-Pereira" title="Luiz Carlos Bresser-Pereira">Bresser-Pereira, Luiz Carlos</a> (May 2010). <a rel="nofollow" class="external text" href="https://www.levyinstitute.org/pubs/wp_592.pdf">The global financial crisis and a new capitalism? (paper 592)</a> (PDF). <a href="Levy_Economics_Institute" title="Levy Economics Institute">Levy Economics Institute</a>.</cite></li>

<li><cite id="CITEREFCushen2013" class="citation journal cs1">Cushen, Jean (May 2013). <a rel="nofollow" class="external text" href="http://mural.maynoothuniversity.ie/11236/1/JCush_Workplace_2013.pdf">"Financialization in the workplace: Hegemonic narratives, performative interventions and the angry knowledge worker"</a> (PDF). Accounting, Organizations and Society. 38 (4): 314–331. <a href="Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.1016%2Fj.aos.2013.06.001">10.1016/j.aos.2013.06.001</a>.</cite></li>

<li><cite id="CITEREFEpstein2005" class="citation book cs1">Epstein, Gerald A. (2005). <a rel="nofollow" class="external text" href="https://www.peri.umass.edu/media/k2/attachments/chapter1.pdf">"Introduction: Financialization and the World Economy"</a> (PDF). In Epstein, Gerald A. (ed.). Financialization and the world economy. Cheltenham, U.K. Northampton, Massachusetts: Edward Elgar Pub. pp. 3–16. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>978-1-84542-965-2</bdi>.</cite></li>

<li><cite id="CITEREFFoster2006" class="citation journal cs1">Foster, John Bellamy (December 2006). "Monopoly-Finance Capital". Monthly Review. 58 (7): 1. <a href="Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.14452%2FMR-058-07-2006-11_1">10.14452/MR-058-07-2006-11_1</a>.</cite></li>

<li><cite id="CITEREFFoster2007" class="citation journal cs1">Foster, John Bellamy (April 2007). "The Financialization of Capitalism". Monthly Review. 58 (11): 1. <a href="Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.14452%2FMR-058-11-2007-04_1">10.14452/MR-058-11-2007-04_1</a>.</cite></li>

<li><cite id="CITEREFFoster2008" class="citation journal cs1">Foster, John Bellamy (April 2008). "The Financialization of Capital and the Crisis". Monthly Review. 59 (11): 1. <a href="Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.14452%2FMR-059-11-2008-04_1">10.14452/MR-059-11-2008-04_1</a>.</cite></li>

<li><cite id="CITEREFKrippner2005" class="citation journal cs1">Krippner, Greta R. (May 2005). "The financialization of the American economy". <a href="Socio-Economic_Review" title="Socio-Economic Review">Socio-Economic Review</a>. 3 (2). <a href="Oxford_University_Press" title="Oxford University Press">Oxford Journals</a>: 173–208. <a href="Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.1093%2FSER%2Fmwi008">10.1093/SER/mwi008</a>. <a href="S2CID_(identifier)" class="mw-redirect" title="S2CID (identifier)">S2CID</a> <a rel="nofollow" class="external text" href="https://api.semanticscholar.org/CorpusID:53957580">53957580</a>.</cite></li>

<li><cite id="CITEREFMoyersBogle2007" class="citation episode cs1"><a href="Bill_Moyers" title="Bill Moyers">Moyers, Bill (host)</a>; <a href="John_Bogle" class="mw-redirect" title="John Bogle">Bogle, John (guest)</a> (September 28, 2007). <a rel="nofollow" class="external text" href="https://www.pbs.org/moyers/journal/09282007/watch.html">"Bill Moyers talks with John Bogle"</a>. <a href="Bill_Moyers_Journal" title="Bill Moyers Journal">Bill Moyers Journal</a>. <a href="PBS" title="PBS">PBS</a>.</cite></li></ul>

<dl><dd><dl><dd><a href="John_Bogle" class="mw-redirect" title="John Bogle">John Bogle</a>, founder and retired CEO of <a href="The_Vanguard_Group" title="The Vanguard Group">The Vanguard Group</a> of mutual funds, discusses how the financial system has overwhelmed the productive system, on <a href="Bill_Moyers_Journal" title="Bill Moyers Journal">Bill Moyers Journal</a></dd></dl></dd></dl>

<ul><li><cite id="CITEREFOrhangazi2007" class="citation book cs1">Orhangazi, Özgür (October 2007). <a rel="nofollow" class="external text" href="https://www.peri.umass.edu/media/k2/attachments/WP149.pdf">Financialization and capital accumulation in the non-financial corporate sector: a theoretical and empirical investigation of the U.S. economy: 1973-2003</a> (PDF). <a href="Political_Economy_Research_Institute" title="Political Economy Research Institute">Political Economy Research Institute</a> (PERI).</cite> Working paper no. 149.</li>

<li><cite id="CITEREFOrhangazi2008" class="citation book cs1">Orhangazi, Özgür (2008). Financialization and the US economy. Cheltenham, UK Northampton, Massachusetts: Edward Elgar. <a href="ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <bdi>9781848440166</bdi>.</cite> <a rel="nofollow" class="external text" href="https://books.google.com/books?id=_IBAWevInNIC">Preview.</a></li>

<li><cite id="CITEREFPalley2007" class="citation book cs1"><a href="Thomas_Palley" title="Thomas Palley">Palley, Thomas I.</a> (November 2007). <a rel="nofollow" class="external text" href="https://www.levyinstitute.org/pubs/wp_525.pdf">Financialization: what it is and why it matters (paper 525)</a> (PDF). <a href="Levy_Economics_Institute" title="Levy Economics Institute">Levy Economics Institute</a>.</cite></li>

<li><cite id="CITEREFScholte2013" class="citation web cs1">Scholte, Jan Aart (June 5, 2013). <a rel="nofollow" class="external text" href="http://ondemand-mp3.dradio.de/file/dradio/2013/10/17/dradiowissen_wie_das_geld_unser_leben_20131017_b952a0b9.mp3">"World Financial Crisis and Civil Society: Implications for Global Democracy (lecture)"</a>.</cite></li></ul>

<dl><dd><dl><dd><a rel="nofollow" class="external text" href="https://web.archive.org/web/20131019124936/http://www.dradiowissen.de/finanzmaerkte-wie-das-geld-unser-leben-bestimmt.88.de.html?dram:article_id=265284">DRadio Wissen Hörsaal</a> (introduction in German, lecture in English)</dd></dl></dd></dl>

<ul><li><cite id="CITEREFThomsonDutta2016" class="citation book cs1">Thomson, Frances; Dutta, Sahil (January 2016). <a rel="nofollow" class="external text" href="https://www.tni.org/en/publication/financialisation-a-primer">Financialisation: A Primer</a>. <a href="Transnational_Institute" title="Transnational Institute">Transnational Institute</a>.</cite></li>

<li><cite id="CITEREFToriOnaran2018" class="citation journal cs1">Tori, Daniele; Onaran, Özlem (August 18, 2018). "The effects of financialization on investment: evidence from firm-level data for the UK". Cambridge Journal of Economics. 42 (5): 1393–1416. <a href="Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.1093%2Fcje%2Fbex085">10.1093/cje/bex085</a>.</cite></li>

<li><cite id="CITEREFToriOnaran2020" class="citation journal cs1">Tori, Daniele; Onaran, Özlem (December 2020). <a rel="nofollow" class="external text" href="http://gala.gre.ac.uk/id/eprint/22196/5/22196%20ONARAN_Financialisation_Financial_Development_and_Investment_2018.pdf">"Financialization, financial development and investment. Evidence from European non-financial corporations"</a> (PDF). Socio-Economic Review. 18 (3): 681–718. <a href="Doi_(identifier)" class="mw-redirect" title="Doi (identifier)">doi</a>:<a rel="nofollow" class="external text" href="https://doi.org/10.1093%2Fser%2Fmwy044">10.1093/ser/mwy044</a>.</cite></li>

<li><cite id="CITEREFVasudevan2008" class="citation news cs1">Vasudevan, Ramaa (November–December 2008). <a rel="nofollow" class="external text" href="http://www.dollarsandsense.org/archives/2008/1108vasudevan.html">"Financialization: A Primer"</a>. <a href="Dollars_%26_Sense" title="Dollars & Sense">Dollars & Sense</a> magazine.</cite></li></ul>

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