HYMAN MINSKY, COMMERCIAL BANKS AND GLOBAL GOVERNANCE: UNDERSTANDING PRUDENTIAL REGULATION IN THE CONTEXT OF FINANCIAL FRAGILITY

André Cutrim Carvalho (), David Ferreira Carvalho (), Martha Luiza Costa Vieira () and Cleyson Silva dos Santos ()
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André Cutrim Carvalho: Universidade Federal do Pará
David Ferreira Carvalho: Universidade Federal do Pará
Martha Luiza Costa Vieira: Universidade Federal do Pará
Cleyson Silva dos Santos: Universidade Estadual de Campinas

Revista de Economia Mackenzie (REM), 2024, vol. 21, issue 1, 244-278

Abstract: The state of the monetary-financial system of a capitalist economy is nothing more than the hypothesis of financial fragility presented by Hyman Philip Minsky. In the prosperity cycle phase, bankers generally experience a climate of optimism regarding expectations of future profits. However, as the level of accumulated profits declines, with companies and families starting to leverage credit from banks in order to pay their debts, then the continuity of financing industrial investments begins to depend not only on the expectations of entrepreneurs regarding expected profits, but also the willingness of bankers, given the risks and uncertainty of granting financing for industrial investments. This article discusses the hypothesis of financial fragility addressed by Minsky as a cause of the financial crises of globalized national economies, as well as the attempt at global governance through the prudential regulations of the Basel Accords.

Keywords: financial fragility; profits; financing; global governance; prudential regulations. (search for similar items in EconPapers)
JEL-codes: E12 G18 G35 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:aft:journl:v:21:1:2024:jan:jun:p:244-278

DOI: 10.5935/1808-2785/rem.v21n1p.244-278

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