1. ‘MONEY’ AND OTHER USELESS CONCEPTS
Anastasia Nesvetailova
City, University of London

3. Three examples ‘Money’ Accumulation Financialisation
Finance, debt, balance sheets (Minsky) Credit, investment, debt (Keynes, Toporowski) Capitalism, society (P. Mehrling)

4. How useful is a concept that has 51 definitions? [financialisation]
Macro-historical school – as a phase in capitalism
Socio-cultural – as transformations led by and within finance
Evolutionary – tradability of risk

5. What is the point of a definition if the concept is amorphous and phenomenon ever-changing? [money]
M0.. M4.. M27…. M 1111st
Legal tender, credit money, local money, shadow money, webmoney, Ether and bitcoin
“Anybody can create money, the problem is to get it accepted” (Minsky)

6. What is the value of scholarship based on obsolete understanding?

7. Yet

8. Brexit Investment Association BBA
European Financial Services Charmian's Advisory Committee
Association for Financial markets in Europe
THECITYUK
Financial Services Negotiating Forum

9. Finance vs Real Economy

10. Why does it matter?

11. The perfect storms of 2007/09 and Brexit

12. Threats Finance, services, the construction industry and manufacturing
UK’s attractiveness for investment is diminished
The City cannot thrive as a financial tax haven
Financial stress in the shadow banking system
External economic environment is less benign
Years of austerity have weakened the public sector

13. Can banking and finance withstand the crisis?
We arrived at this moment:
weakened by austerity;
debating three visions of finance;

14. 1. Nostalgic

15. 2. Continual (same, but better regulated)

17. 3. Evolutionary

18. 1. Radical proposals 100% reserve banking Higher capital charges
Capital controls
FTT
Separation of ‘utility’ and ‘casino’ banking
Making banks into closed partnerships - but shareholders do have influence
‘bring back’

19. Glass-Steagall No going back to 1933 because the original was flawed
“A new Glass-Steagall Act would have to be substantially different from the original, and some of the internal structural contradictions that led to its demise remedied”
(Kregel 2010).

20. The problems with nostalgia
Most radical proposals are not applicable in the capitalism of futurity:
“In its modern meaning, capital is divorced from the obsolete meaning of savings, because modern capital is comprised of intangible property (the present value of future sales) and incorporeal property (the present value of expected payments of debt)”
(Commons 1934: 456, cited in Atkinson and Whalen 2011: 55).
Debt (and risk) is a foundational feature of capitalism today.

21. The problem with debt
Economic theory and policy has a lot to say about individuated aspects and power of debt
But debt is foundational because in tightly integrated economic systems of today it is aggregative

22. 2. More regulation is not better regulation
Basle III and higher capital requirements
Over-collateralisation
New regulations have pushed many banking activities into the shadow banking system
Regulatory capture

23. Next crisis (e.g. Brexit )
May involve pensions funds, asset managers and insurance sector
Maybe CCP
Politically it may be easier and cheaper to bail out a bank
The post-2009 banking system is being tested

24. 3. Technological evolution
Banking is changing as we speak
Less intermediation and more direct human /techno involvement
Financial ‘market’ is increasingly, an abstraction
The regulators are fighting the last war, and most of these developments remain overlooked as are the risks of the new industry
Politicians are slower still.
Regulatory capture, again

25. Where next? Evolutionary development of finance and banking
Treating key aspects of finance as public goods/utility (the state)
But all new opportunities will only become realisable after the next crisis
Are we ready?

26. Regulators Much better prepared than in 2006
But there is a lag between the quantity of new data, information and the ability and capacity to work with this data

27. Academics Mainstream is largely a lost case.
Civil society: there is a problem of expertise, capture and ideological presumptions (Financial transaction case is an example)

28. Politicians
Political cycle is shorter than the financial cycle In an ideal scenario, politicians needed to work closely with the industry preparing for the next (inevitable) financial crisis and developing tools and ideas

29. Since 23 June We have seen:
That politicians tend not have a clue about the risks
‘Experts’ have been dismissed
There is still a very weak understanding that Brexit is not a UK event but a global re-evaluation of assets, going concerns and risks
Central banks, again, are the crisis managers