Income Inequality: The Battlefield Casualty of Post-crisis Financial Policy

Karen Shaw Petrou

Chapter 2 in Achieving Financial Stability:Challenges to Prudential Regulation, 2017, pp 13-24 from World Scientific Publishing Co. Pte. Ltd.

Abstract: After such a busy day with so many fine presentations, you may think it a bit apocalyptic to start this dinner speech with thoughts about Napoleon’s invasion of Russia in 1812. No worry, I have not brought in cannons or Tchaikovsky’s “1812 Overture” to accompany my remarks. But I will start with a quote from Tolstoy’s War and Peace which resonated with me as I was thinking about my theme tonight: The urgent need to act on increasingly clear flaws in the new financial-market structure as economies struggle to recover and political systems show stark signs of popular despair. If we aren’t safer even as globalization breaks down and income inequality widens, then we have a recipe if not for Napoleonic-style invasion, then at least for still more populist marches on the capitals of the US, UK, France, the Netherlands, and many other nations. Profound political discontent without robust growth is a dangerous combination and it’s due at least in part to the post-crisis financial framework. Actions necessary to forestall still worse damage from the 2008 crash are eight-plus years on redesigning financial markets in ways that damage the ability of lower-income people to lift themselves up. Eight-plus years on, rules designed to make finance safer are instead redesigning markets in ways that undermine credit delivery, deposit-taking, and short-term liquidity. We all wish this weren’t so, but it is. This evening, I’d like to explain why I think the current situation is so dangerous and lay out action steps to financial policies that again meet their prime objective: making nations more prosperous so we all can live more peaceably…

Keywords: Money and Banking; International Banking; Financial Instititions; Banks; Regulations; Compliance; Financial Crisis; Great Financial Crisis 2008; Microprudential; Macroprudential; Financial Stability (search for similar items in EconPapers)
JEL-codes: E50 (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.worldscientific.com/doi/pdf/10.1142/9789813223400_0002 (application/pdf)
https://www.worldscientific.com/doi/abs/10.1142/9789813223400_0002 (text/html)
Ebook Access is available upon purchase.

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:wsi:wschap:9789813223400_0002

Ordering information: This item can be ordered from

Access Statistics for this chapter

More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().