Chronic. Global finance is in trouble. It is no longer liberalized, but under assistance. It is no longer integrated, decompartmentalized, but in the process of balkanization. Are we on the way to financial deglobalisation? May be. But only of a “deglobalization” of safeguard, because of the management of the financial crises then health. Of a war deglobalisation, because of the financial sanctions taken against Russia. When will there be a deglobalization of transformation, the one that will allow our societies to get better?
We must not forget that the apparent technical complexity of the changes in finance does not conceal the exercise of political will! Financial globalization, this process of expansion of interconnected, integrated and internationalized markets, products and players, largely proceeded from a political will to liberalize which asserted itself at the turn of the 1970s and 1980s, first in Anglo-Saxon countries, then on the European continent, before reaching emerging countries. Public power was then voluntarily erased, the States going so far as to sacrifice their direct access to the counter of their central bank and accept the independence of the latter. It placed its trust in the free play of the market, with the tacit intention of the rise of financial capitalism. With the consequences that we know in terms of inequalities, financial instability and environmental damage.
Disconnect the infusion
The deregulation of banks has been one of the driving forces in this process. It is not the timid reregulations of the years 1990-2000, resulting from the Basel agreements, which slowed down the pace of globalized finance. Because they were designed to support and preserve the game of the market and protect some of its actors from its jolts – especially the banks –, and not to regain control over the allocation of capital, the creation and circulation currency. Logically, these so-called “prudential” re-regulations did not prevent the financial crisis of 2007-2008.
It was then that the return of public power became much more urgent, but above all to prevent financial capitalism from self-destructing and to ensure its survival, even its deepening, this time through monetary means. The public currency, the one created by the central bank, was made available to banks and financial markets. Emergency intervention, decided at the time of the financial crisis of 2008, has become protracted assistance. Each time it was considered to disconnect the infusion of central liquidity, a more or less strong source of destabilization came to prevent it: the crisis of the American money market in the fall of 2019, the health crisis from January 2020, and today the war in Ukraine, which makes central banks consider relaunching their asset purchases in the event of a recession, as suggested by a statement by Isabel Schnabel, member of the executive board of the European Central Bank, the March 24.
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