The political economy of (global) banking and the limits of growth model theory
Type
conference paper
Date Issued
2024-07-04
Author(s)
Abstract
Despite numerous regulatory measures aimed at reducing the size, complexity, and power of these financial institutions, European global banks remain as large—or even larger—than in 2008, and as interconnected as before. This contradiction raises the question: what explains the evolution of European banking since the crisis? By analyzing the interplay between state power and global banking, the paper argues that the evolution of European banks has been driven by political priorities aimed at maintaining their position within the global financial hierarchy, rather than adhering to national growth models. The paper then highlights the structural contradictions faced by European banks due to the extroverted nature of their process of financialization, which have resulted in their inability to compete equally with US banks and their struggles to fulfill traditional domestic banking functions. The notion of (S)tra(te)gic banking developped in this paper thus encompasses the state-supported strategy of European banks seeking power at the global level while maintaining traditional banking functions at the domestic level, and the structural contradictions that has led to their tragic failures in both.