Dilemmas and Paradoxes of Fragile Finance

Anastasia Nesvetailova
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Anastasia Nesvetailova: City University

Chapter 5 in Fragile Finance, 2007, pp 72-84 from Palgrave Macmillan

Abstract: Abstract Finance then, is neither a cloud that daunts over the real economy, nor a well-anchored structure that parallels the progress of the economy in a predictable and straightforward way. The conclusion we draw from a Minskyan reading of financial capitalism suggests that finance is highly complex, flexible and capable of mutation. It is in the inner transformations of the financial system, typically in a link with the rest of the economic system, where fragility and crisis arise. Moreover, it appears that the obscurity and complexity of today’s finance, although a problem for regulators in itself, conceals several important paradoxes of the privatised financial system. These paradoxes centre on the ever-present capacity of financial markets to expand through the process of financial innovation.

Keywords: Interest Rate; Central Bank; Asset Price; Real Exchange Rate; Liquid Asset (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-0-230-59230-8_6

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DOI: 10.1057/9780230592308_6

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