Proposals for deploying monetary policy to fight climate change and reduce inequality rely on the use of the nation state’s monetary authority to allocate capital to different parts of the economy. Against those proposals stands the publicly stated commitments of central bankers to avoid ‘allocating credit’ by implementing ‘market-neutral’ policies. A review of the financial empirics of central banks’ market operations shows a historically consistent pattern of using monetary authority to allocate debt and equity capital to different sectors of the economy at critical moments. Legal frameworks impose no effective constraints on that state-guidance of investment and, when necessary, the law of central banking actively facilitates capital allocation in ways that allow policymakers to fight deflation, provide emergency fiscal support, and rescue crisis-stricken parts of the financial sector. Against those empirics, commitments to avoid capital allocation appear as communication strategies rather than descriptions of the reality of central bank operations. Given the position of central banks as statutory public agencies, this creates various types of constitutional problems, notably concerning the protection of liberal property rights from government interference. Understanding these legal, market, and political dynamics provides a principled basis to debate reform proposals regarding the constitutional status and institutional functions of central banks in market economies responding to climate change and destructive inequality.

In an exceptional phenomenon in world history, eleven European countries, among the richest in the world, freely decided to create a monetary union in 1992, doing so during a powerful neoliberal shift. How to explain this, and what connection is there between European monetary integration and neoliberalism? This chapter argues that monetary union cannot be reduced exclusively to its neoliberal dimension, as forging such a union was devised by European leaders before the neoliberal turn, and had numerous justifications including ones more consistent with the solidarity and the community governance of capitalism. While the literature on the history of the European Monetary Union is extensive, additional archival research conducted for this book has shed new light on two neglected factors: the importance of projects for monetary cooperation devised in the 1950s and 1960s within the framework of the EEC (before the neoliberal turn); and the crucial importance of concerted stimulus in 1978, followed by German balance of payment difficulties in 1980–1981, which explain the convergence towards stability-oriented policy.

This chapter presents the Depression of the 1780s as one of, if not the, formative events of the Revolutionary era. The Depression shook Americans’ post-Revolutionary confidence and forced them to make fundamental changes to their economic and political institutions. Contrary to previous interpretations, this chapter argues that the Depression arose from a major contraction of America’s deficient money supply rather than flaws in the real economy. British postwar monetary retrenchment resulted in currency, credit, bills, and notes racing eastward across the Atlantic, leaving American markets devoid of money and halting economic activity. Put simply, the new nation’s financial institutions, if they existed at all, could not defend the American economy against British financial power. The collapsing money supply curtailed transactions, forestalled investment, and produced a deflationary spiral that hit every corner of the American economy. The abatement of British retrenchment and creation of stronger American financial institutions helped ease the crisis, but the Depression revealed the profound vulnerability of the Confederation’s fragmented economic system.

Housing is a defining issue of our time, driving a persistent affordability crisis, financial instability, and economic inequality. Through the Roof examines the crucial role of the state in shaping the housing markets of two economic powerhouses – the United States and Germany. The book starts with a puzzle: Free-market America has vigorously supported homeownership markets with generous government programs, while social-market Germany has slashed policy support for both homeownership and rental markets throughout the past century. The book explains why the two nations have adopted such radically different and unexpected housing policy approaches. Drawing on extensive archival material and interviews with policymakers, it argues that contrasting forms of capitalism – demand-led in the United States and export-oriented in Germany – resulted in divergent housing policies. In both countries, these policies have subsequently transformed capitalism itself.

Chapter 8 emphasises that the transition to financialised banking was no easy shift and only saw exceptional profits for a limited amount of time for European banks, if compared to US banks. This challenges accounts of financialisation that see the transition to US investment banking as a straightforward shift towards higher profits compelled by securities markets. The chapter documents the problems and contradictions that banks experienced internally and externally, and the resistance of Deutsche Bankers to the practices of liability management (LM) as they experienced losses of their traditional power and autonomy over banking practices. This chapter thus shows how unlikely it was initially for Deutsche to transform so thoroughly towards US finance. It argues that LM is better understood as a necessity to accommodate the higher costs, risks and logics of banking in US money markets. While the financial calamity of 2008 propelled a rethink of Deutsche’s path, financialised banking is not easily reversed, and German banks continue to struggle with the need to raise USD funding. As such, we should worry about banks’ USD funding gap as key source of vulnerability and risk. While a few select US banks have excelled in mastering LM as a powerful technique to flexibly (mis-) match their balance sheets, everyone else suffers from the fallout of the relentless near crisis mode of global finance.

This chapter maps out the trajectory of British postmodern fiction in three specific phases: a gradual emergence characterised by slowly increasing textual experimentation in the 1960s and 1970s; a second phase notable for a high level of fictional critique of the political and economic order in the 1980s and 1990s; and a third period in the early twenty-first century, by which point both the techniques and ideas associated with postmodern literature had become so commonplace that they could no longer be considered critically oppositional. In identifying these phases, the chapter departs from Fredric Jameson’s famous suggestion that postmodernism embodies the cultural logic of late capitalism and is therefore completely unable to generate any effective criticism of the dominant ideology of global capitalist societies and shows that at its height British postmodern fiction constituted a genuinely critical form of writing with regard to that ideology.

This chapter describes the critical and speculative capacities of the Occupy novel, or contemporary novels that represent Occupy Wall Street and the Occupy movement more broadly. It argues that such fiction represents the financialization of everyday life, that is, the colonization of personal life and political subjectivity by Wall Street or finance capital. In doing so, it returns the question of social class to the center of US political debates. However, the Occupy novel also speculates on the possibilities of postcapitalist social life; it treats Occupy Wall Street as prefiguring new kinds of economic relations and social conducts. The chapter frames the Occupy novel in terms of its predecessor, the fiction of the post-2008 financial recession (“crunch lit”). Whereas crunch lit diagnoses financialization as a problem of households (personal debt, family crisis, and so on), the Occupy novel asks whether literature (and art in general) might have the capacity to engage in social struggle, to imagine new forms of public life.

In 2020, Lebanon faced one of the worst financial crises since the 1800s, as reported in major news outlets. Severe shortages in the central bank’s US dollar reserves triggered a full financial collapse, compounding crises in sectors like electricity, water, and fuel. This chapter explores the roots of Lebanon’s financial crisis by analyzing its deep dependency on the US dollar. It argues that this reliance traces back to colonial mercantilist influences embedded within Lebanon’s central bank. The chapter highlights recurring patterns in the bank’s historical development, shaped by colonial rationalities. First, it conceptualizes the establishment of Lebanon’s central bank under French colonial rule as a means to monopolize their currency, favor French financial markets, and control the region through debt relations. Second, it shows how these colonial rationalities persisted even after decolonization, becoming entrenched in the bank’s operations. The chapter concludes that these colonial influences have ingrained foreign currency dependency, continuing to shape Lebanon’s contemporary financial landscape.

This conversation addresses the impact of artificial intelligence and sustainability aspects on corporate governance. The speakers explore how technological innovation and sustainability concerns will change the way companies and financial institutions are managed, controlled and regulated. By way of background, the discussion considers the past and recent history of crises, including financial crises and the more recent COVID-19 pandemic. Particular attention is given to the field of auditing, investigating the changing role of internal and external audits. This includes a discussion of the role of regulatory authorities and how their practices will be affected by technological change. Further attention is given to artificial intelligence in the context of businesses and company law. As regards digital transformation, five issues are reflected, namely data, decentralisation, diversification, democratisation and disruption.

The epilogue covers the development from Basel I to III and reflections on the evolution of capital regulation in the long run. Particular emphasis is given to the divergence of risk-weighted and risk-unweighted capital ratios among large, global banks – most of which have their roots in the nineteenth century. The chapter calls for a fundamental reassessment of banking regulation. From a historical perspective, regulatory frameworks are highly path dependent and seldom fundamentally reconsidered, aiming to increase financial stability. Moreover, once we accept a certain degree of banking instability in modern banking, the focus should be on who covers losses and how significant such losses can potentially be without the involvement of the public.