Financialisation has pervasive effects on our societies, and the FESSUD project has been analysing and seeking to understand those effects, to probe the interrelationship of financialisation and financial crisis and to develop policy agendas.

This conference had over two days of concentrated presentations and lively discussion of nearly 50 papers. It focused on understanding the causes and consequences of the financial crisis and the role of financialisation in the financial crisis. It was concerned with the policy agendas towards the financial stability through regulation and macroeconomic policies.

These themes were pursued through sessions bringing forth some of the research findings of the FESSUD project, two keynote addresses and eight contributed papers.

Analysing and understanding the processes of financialisation with the changing relationships between the financial and the real sectors and the causes and consequences of the financial crises of 2007/2009 have been central to the FESSUD project. Country studies covering 15 countries have been undertaken to explore the changes in the relationship between the financial and the real sector, the processes of financialisation and the present financial and economic crisis.The presentation at the conference provided an overview and synthesis of these 15 studies. The evolution of the relationship between the financial and the real sector in the context of the present economic and financial crisis, and analysis of the impact of that crisis on EU member states were the subject to two presentations : Changes in the relationship between the financial and the real sector and the present and financial economic crisis in the EU. By drawing on the lessons and analyses of financialisation and the financial crisis, a synthesis on ‘the characteristics of a more resilient financial and economic system’ has been developed.

Financialisation has involved the widening scope of finance into everyday life. In the session on ‘Finance and everyday life: (Re) producing differentiation’ the differentiated impact of financialisation and of the crisis on well-being in 5 EU countries. The perspective from civil society came in ‘Reforming finance: A view from civil society and marginalised groups in Portugal. The session then concluded with ‘Ten things we need to know about the financialisation of everyday life’.

Many dimensions of the relationships between finance and the real economy were explored in the session on ‘Financialisation and industry’. Some effects on ‘Reputation, Corporate Social Responsibility, and Corporate Performance. Theory, empirical evidence and policy implications’ were considered. Some of the alternative ways in which industry can be financed featured in ‘‘Disintermediation and alternative forms of financing the real economy’. The FESSUD case studies on housing were presented in ‘The system of provision for housing: findings from FESSUD case studies. And FESSUD case studies were drawn on to provide ‘Thirteen things you need to know about neoliberalism: lessons from FESSUD case studies.

Monetary and fiscal policies featured in the session on ‘Policy mix in EU new member states and Turkey’ with papers on central banking and on fiscal policy in Turkey. The relationships between the European Central Bank and the new member states of the EU were evaluated in ‘Our banks, our currency, your problem’. On the ECB’s relationship with New Member States, during and after the crisis’.

Two sessions were devoted to Financialisation, Sustainability and the Environment. The relationships between financialisation and the natural and built environments were addressed in three presentations. Alternative monetary arrangements featured in ‘Redesigning money to curb globalization. The interactions between financial sector and energy are elaborated in ‘What is special about financial instruments on energy commodities’. And a way of financing low carbon transition comes in ‘Green growth and the governance and financialisation of low carbon transition’.

Financialisation has been a global phenomenon with major growth of capital flows between countries. The sessions on ‘Financial flows between Europe and developing countries’ reflected that.

The sessions covered:

How will the financial sector and financialisation evolve over the coming decades? FESSUD is seeking some answers in its foresight exercise. The session on the foresight exercise opened with an overview of how the ‘Mapping the future of financialisation’ is being undertaken. Different methods are being deployed in the foresight exercise, including ‘a Delphi study on the future of finance. This was followed by an enquiry into ‘Financialisation, debt and inequality – scenarios based on a stock flow consistent model. The future of relationships between industry and finance was addressed in ‘Industry and finance: antagonism or symbiosis?’. The manner in which financialisation of public services may evolve was viewed through a case study of ‘The financialisation of health in the UK’.

The final session on FESSUD work sought to draw together some of the wide range of findings under the title of ‘What has FESSUD found?: moving towards a synthesis’. The session focused on three topics. One placed ‘Financial market reforms as part of a new regulation model of capitalist economies [link to Herr presentation]. The inter-disciplinary nature of the FESSUD project was reflected in ‘Developing a better economics through building alliances with other disciplines’. Three major themes of the FESSUD project were clearly present in ‘Finance, Environment and Sustainability: insights from the WP7.

The keynote speakers were: 

  • Laszlo Andor, former European Commissioner for Employment and Social Affairs, addressed the issue of the need for restoring convergence and cohesion in the Economic and Monetary Union and developed ideas of how an EMU wide unemployment insurance system can play a role operating as an automatic stabilizer of demand.
  • Professor Gerald Epstein, University of Massachusetts  Amherst, addressed the theme of Confronting Financialisation asking whether the social benefits of the financial justify its size. He explores the growth of the financial sector, how it has become too big and policies to confront its size and power.

The contributed papers addressed three sets of themes relating to financialisation and its effects. One set of papers focused on financialisation and the global economy with presentations on ‘Does global economic prosperity require global financial governance (Gary Dymski) and ‘Capitalism, market economy and the democratic state’ (Anna Zabkowicz and Stawomir Czech). Another set of papers related to the theme that there are varieties of financialisation. ‘The limits to financialisation in Spain’ (Ismael Yrigoy), ‘Three systems, one crisis? Varieties of financialisation in France, Germany and the UK’ (Johannes Petry), and ‘Financialisation: dimensions and determinants’ (Mimoza Shabani, Ewa Karawowski and Engelbert Stockhammer). The third set of papers considered some of the ‘Implications of Financialisation’ with presentations on ‘Implications of financialisation for deindustrialization in developing economies: the case of Turkey’ (Aylin Soydan), ‘The implications of financial agency – consumer organisations and their role in EU post-crisis consumer regulation’ (Marcus Wolf) and ‘The financialisation of local government: municipal governments’ activities on financial markets’ (Sebastian Moeller).

Gerald A. Epstein – Confronting Financialization and the Size of the Financial System