The role of banks and the State in the shaping of the French fund industry

Nicolas Bedu ()
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Nicolas Bedu: LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique

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Abstract: The article deals with the issue of the French financial system design based on a historical analysis of the development of the fund management industry. It recounts how the main banks have become leaders in the global asset management industry. This success relies on a long-term institutional evolution towards a hybrid model and the ongoing close relationships between banks and the State since the end of World War II. The establishment of a friendly institutional framework for the bank intermediation expansion was rooted in the seizure of power by reformist civil servants in the late 1950s and the early 1960s, who would later become heads at the Treasury and the main banks. We also argue that the State’s ability to develop new forms of interventions, especially during financial liberalization and European construction, has been crucial in the development of a competitive fund industry. Finally, we show that the State’s and banks’ interests have driven the hybridization process of the fund sector and that the fund sector serves primarily the State’s interests and the funding needs of the financial sector at the expense of the real economy.

Date: 2019-07
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Published in Review of International Political Economy, 2019, 26 (4), pp.573-603. ⟨10.1080/09692290.2019.1596146⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02107225

DOI: 10.1080/09692290.2019.1596146

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