Capital and income financialization: Accounting for the 2008 financial crisis

David Hatherly and Gavin Kretzschmar

Accounting forum, 2011, vol. 35, issue 4, 209-216

Abstract: Financialization is recognised as a key feature of the 2008 financial crisis. We argue that a lesson is the need for an accounting framework which focuses upon financialization allowing it to be monitored and controlled by stakeholders. We argue that financialization has been permitted through the failure of accounting to distinguish distributable income from capital gains/transfers and to distinguish productive from speculative capital. We introduce an accounting presentation (4S accounting) which effectively makes these distinctions. We use a stylized example to illustrate how it should be applied to the financial reporting of banks.

Keywords: Capital versus income; Comprehensive income; Financial crisis; Financialization (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S015599821100038X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:accfor:v:35:y:2011:i:4:p:209-216

DOI: 10.1016/j.accfor.2011.06.010

Access Statistics for this article

Accounting forum is currently edited by Glen Lehman

More articles in Accounting forum from Elsevier
Bibliographic data for series maintained by Catherine Liu ().