This workshop on the Political Economy of Banking and Finance will focus on the politics of financial integration and fragmentation in Europe and beyond - a topic ripe for investigation by an interdisciplinary group of scholars drawing on political economy methods and theory.
Its intellectual point of departure is to consider two apparently conflicting phenomena in financial regulation in the post-2008 era. On one hand, many of today’s regulatory battles play out at the international or multilateral level, representing a process of market integration in which institutions such as the FSB and Basel Committee of Banking Supervision increasingly dominate both agenda-setting and implementation. The European Union has also consolidated its role in cross-border financial regulation and supervision over the past decade.
On the other hand, the FSB itself has lately remarked on the seemingly opposing process of regulatory fragmentation. There continues to be substantial national and sub-regional regulatory divergence, both globally and also within the European Single Market. National policymakers continue to pass new policies which arguably further cement differences among competing regions and markets.
In this workshop, speakers and participants will seek to examine and uncover the mechanisms behind these dual processes of integration and fragmentation. Please find the abstract of the keynote that will be delivered by Prof. Benjamin Brown (LSE) below. For further details, please see the attached programme.
Wealth regimes and the institutionalization of capital
Benjamin Braun (LSE)
For the durability of wealth and wealth inequality, much depends on the returns wealth owners achieve with their portfolios. This paper, presents a theory of asset manager capitalism as the latest in series of capitalist wealth regimes, defined as institutional forms of organizing claims on the means of production. The historical evolution of wealth regimes is driven by variation in two institutional dimensions, with implications for three outcome dimensions. On the institutional side, the first dimension is the nature of capital—and therefore of the dominant assets in wealth portfolios—at different stages of capitalist development. The second institutional dimension is the asset management function. Wealth owners may own the means of production directly; hold financial claims on the profits generated by businesses; or hold claims on collective investment vehicles that in turn hold claims on businesses. Here, financial history shows a slow but inexorable rise and specialization of institutional capital pools. On the outcome side, wealth regimes are characterized by the trade-off between the diversification and liquidity of portfolio holdings on the one hand, and control over the underlying, profit-generating economic activities on the other. Applying this theoretical framework to the main formations found in the history of capitalist development, the paper traces the emergence of asset manager capitalism as the first wealth regime that empowers wealth owners to square the circle of enjoying diversification and liquidity while also benefiting, via their asset managers, from extensive control over business activity.