1. Recent trends in financialisation and future prospects
Malcolm Sawyer
University of Leeds UK

2. Outline Remarks on financialisation
Recent trends in financialisation since the GFC
Financialisation and economic growth
The future of financialisation
‘Peak finance’
Roles of finance and the future

3. What is financialisation?
Introduction
What is financialisation?
Financialization means the increasing role of financial motives, financial markets, financial actors and financial institutions in domestic and international economies, societies, polities and the environment (adaptation of Epstein’s definition)

4. The forms of financialisation in recent decades
Introduction
The forms of financialisation in recent decades
Rapid increase in scale of financial sector in almost all countries
Variegated financialisation
Shifts from bank/institution based to market based; some fusion between them
Growth of securitisation, derivatives etc.
More concentrated and internationalised banking sectors
Shifts away from mutual and public ownership

5. Recent forms of financialisation
Introduction
Recent forms of financialisation
De-regulation and financial liberalisation
Rising inequality
Occurrence and effects of financial crises

6. Trends in financialisation since the GFC

7. Poland

8. Trends in financialisation since the GFC

10. Global OTC derivatives

12. Financialisation and economic growth
Financial deepening (scale of the financial sector) is one key element of financialisation
Previous studies had generally shown positive relationship between economic growth and financial deepening: some questions on direction of causation, and on relative efficiency of bank-based vs. market based

13. Financialisation and economic growth
Many studies have recently found relationship has become negative over some range (inverted U-shaped relationship) with many industrialised countries operating on the negative part of the curve.
Why has the relationship changed?

14. Financialisation and economic growth
Publication ‘bias’?
Rise of household debt
Nature of what the financial sector does (though financial deepening often refers to banks and equity markets)

15. The future of financialisation
Within the FESSUD project foresight exercises conducted including Delphi study. Views on future scale of financial sector ranged between roughly no change and slower pace of increase.
Has there been ‘peak finance’?
How could the financial sector continue to expand?

16. The future of financialisation
More finance-retarded than finance-led growth
Can the financial sector continue to expand?

17. The future of financialisation
Expansion of its role as facilitating savings and monitoring investment unlikely and may diminish
Expansion of financial sector into areas of social provision, e.g. pensions

18. Towards de-financialisation?
Role of re-structuring of the financial sector and institutions to focus on savings banks and investment banks
Role of taxes on financial transactions and activities