Making Financial Instability Visible in Space as Well as Time

Dymski, Gary A.

doi:10.1002/9781119051374.ch4

Cited by 5 publications

(2 citation statements)

References 37 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In the case of Marxian geography, Dymski (2017) points out the conceptual limitations associated with the Harveyan premise wherein financial crises are not so much a product of the inherent financial fragility of the capitalist economy, but rather symptoms related with the deeper contradictions of capital. For a better understanding of monetary phenomena, Dymski highlights the importance of real time and uncertainty, two of the most fundamental pillars of the theories of Keynes and Minsky.…”

Section: On Theorymentioning

confidence: 99%

On financialization and its future

Ioannou

Wójcik

2018

Environ Plan A

View full text Add to dashboard Cite

Born as a term with a critical connotation towards finance, financialization has been widely employed in social sciences, despite the vagueness often surrounding it. In this article we discuss the concept of financialization with a focus on three dimensions. First, we highlight the crucial role of theory in shaping the depth of one’s understanding of the term. Second, we discuss the merits and limitations of the term as a means for bringing together researchers from different communities. Third, we reflect on its future. We argue in particular that the various phenomena associated with financialization involve different boundaries and temporalities. These differences are important, first for appreciating the openness of possible outcomes, and second, for anticipating potential convergences in scholarly perceptions of financialization that might occur in the near future.

show abstract

Section: On Theorymentioning

confidence: 99%

On financialization and its future

Ioannou

Wójcik

2018

Environ Plan A

View full text Add to dashboard Cite

show abstract

“…Although the relatively persistent structure of global trading centres suggests that ‘the political–economic geography of forex markets is subject to powerful inertia’ (Wójkic et al, 2017, p. 273), we show that the evolving nature of swaps, from public to private, has significantly altered the geopolitical arrangements underpinning the dollar hegemony: the distribution of currencies traded, nationalities of financial institutions (where legally headquartered), and geographic and legal locations of trading are increasingly skewed, reflecting both the dominance of the dollar as international financing and settlement currency and the uneven international distribution of dollar-denominated assets and liabilities. Using a Minskyan lens (see Dymski, 2017; Bonizzi and Kaltenbrunner, 2019; Gabor, 2020), we document the changing composition of FX swaps users on both the long-dollar and short-dollar side and identify sources of macrofinancial vulnerabilities for dollar lender and borrower countries. In doing so, we provide novel insights into the geography of the ‘global financial cycle’ (Rey, 2015), with its large dollar-dominated FX swap footprint, hitherto neglected in the scholarly literature.…”

Section: Introductionmentioning

confidence: 99%

FX swaps, shadow banks and the global dollar footprint

2022

View full text Add to dashboard Cite

The era of dollar-based financial globalisation has seen a steady rise in the use of foreign exchange (FX) swaps. We provide a macrofinancial political economy perspective on the geography of FX swaps, and the spatial effects of central bank policies aimed at taming instabilities associated with the uneven geography of the dollar. First, we analyse the mechanisms and potential sources of instability involved in accessing dollars using FX swaps and repurchase agreement (repo) contracts, respectively, in both private and public (central bank) use. Second, we show that the distribution of currencies and institutions involved in trading swaps is skewed, reflecting both the dominance of the dollar as international financing currency and the uneven international distribution of dollar-denominated assets and liabilities. We document the changing composition of dollar swap users on both the long-dollar and short-dollar side and identify potential sources of macrofinancial vulnerability for dollar lenders and borrowers. The Fed's approach to global liquidity provision via both swaps and repos constitutes a spatially variegated strategy to preserve the hegemony of the US dollar. Despite its partial success in reducing instability due to cross-border financial imbalances, the Fed's uneven and hierarchical lender of last resort approach cannot sufficiently stabilise global finance to underpin a new era of macrofinancial stability.

show abstract

Liability-driven investment and pension fund exposure to emerging markets: A Minskyan analysis

Bonizzi

Kaltenbrunner

2018

Environ Plan A

View full text Add to dashboard Cite

This paper explores the determinants and implications of the growing allocation of insurance companies and pension funds (ICPF) to emerging markets (EM). The key contention put forward is that liabilities are at the core of the portfolio choice of ICPF, and that this has important consequences for the stability of asset demand. The paper supports this contention with a theoretical framework based on Hyman Minsky, and the results from 22 semistructured interviews with European ICPF executives, investment consultants, and asset managers. It shows that the rising ICPF demand for EM assets has to be analysed in the context of the pressures resulting from structural funding deficits and low yields. EM assets are sought as part of the sector's strategy to increase returns and, given their subordinate integration into a spatially uneven international monetary and financial system, remain not suited to directly meet ICPF's liabilities. This causes ICPF' demand for these assets to be volatile and independent of conditions in these countries, reproducing EM' monetary and financial subordination. By stressing the structural financial (in)stability implications ICPF liabilities have for EM asset demand, the paper contributes to the literature on ICPF investments in EM, and bridges the gap between those which have noted the importance of liability conditions for ICPF and the literature pointing to the destabilising impact of ICPF due to behavioural and agency issues. Moreover, by basing itself on a Minskyan theoretical framework, it responds to recent calls for a more systematic incorporation of heterodox economic thought into financial geography.

show abstract

Making Financial Instability Visible in Space as Well as Time

Cited by 5 publications

References 37 publications

On financialization and its future

On financialization and its future

FX swaps, shadow banks and the global dollar footprint

Liability-driven investment and pension fund exposure to emerging markets: A Minskyan analysis

Contact Info

Product

Resources

About