Hostname: page-component-7d684dbfc8-lxvtp Total loading time: 0 Render date: 2023-09-23T17:18:14.468Z Has data issue: false Feature Flags: { "corePageComponentGetUserInfoFromSharedSession": true, "coreDisableEcommerce": false, "coreDisableSocialShare": false, "coreDisableEcommerceForArticlePurchase": false, "coreDisableEcommerceForBookPurchase": false, "coreDisableEcommerceForElementPurchase": false, "coreUseNewShare": true, "useRatesEcommerce": true } hasContentIssue false

Banks and the False Dichotomy in the Comparative Political Economy of Finance

Published online by Cambridge University Press:  01 October 2013

Get access


The wide-ranging varieties of capitalism literature rests on a particular conception of banks and banking that, the authors argue, no longer reflects the reality of modern financial systems. They take advantage of the greater information regarding bank activities revealed by the financial crisis to consider the reality, across eight of the world's largest developed economies, of the financial power of banks to act as bulwarks against market forces. This article offers a market-based banking framework that transcends the bank-based/capital market–based dichotomy that dominates comparative political economy's consideration of financial systems and argues that future CPE research should focus on the activities of banks. By demonstrating how market-based banking increases market influences on the supply of credit, the authors highlight an underap-preciated source of financial market pressure on nonfinancial companies (NFCs) that can have a potential impact across the range of issues that the varieties of capitalism (VoC) literature has seen as differentiating national systems. This approach has implications in areas such as labor, welfare, innovation, and flexibility.

Research Article
Copyright © Trustees of Princeton University 2013 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)