 The Rise of Fragile FinanceAnastasia Nesvetailova
Chapter 1 in Fragile Finance, 2007, pp 9-24 from Palgrave Macmillan Abstract: Abstract Not so long ago, finance and credit were considered to be a ‘service’ economy, supporting what many still consider to be the ‘real’ economy — manufacturing, labour, trade, tourism and so on. However, from the late 1960s onwards, perceptions about the role and functions of credit and finance have begun to change dramatically. To begin with, it appeared that on its own, financial system was able to generate massive, and relatively easy, profits, and that a growing proportion of the GDP of many advanced capitalist countries was generated by the financial sector alone. In the UK for instance, by the 1990s, the share of the financial sector in the economy as a whole surpassed 20% of the country’s GDP. More importantly, the financial sector has acquired a far more prominent role in the political economy as a whole, especially when compared to the ‘golden age’ of capitalism — the economy of the Bretton Woods regime. Increasingly, the success or failure of an economy was related to the success or failure of the financial system. What were the causes of such a dramatic shift? Keywords: Exchange Rate; Commercial Bank; Portfolio Investment; Private Credit; Exchange Rate Risk (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-0-230-59230-8_2 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Palgrave Macmillan Studies in Banking and Financial Institutions from Palgrave Macmillan |
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