Against (the idea of) financial markets. (November 2015)

• Record Type: Journal Article
• Authors: Christophers, Brett
• Is Part Of: Geoforum. Volume 66(2015)
• Page Start: 85
• Page End: 93
• Publication Date: 2015-11
• Subjects: Finance -- Markets -- Banks -- Financial systems -- Disintermediation; Geography -- Periodicals; Human geography -- Periodicals; Regional planning -- Periodicals; Sciences de la terre -- Périodiques; Géographie -- Périodiques; Géographie humaine -- Périodiques; Aménagement du territoire -- Périodiques; Earth sciences; Geography; Human geography; Regional planning; Periodicals; Electronic journals; 304.205
• DOI: 10.1016/j.geoforum.2015.09.011
• Languages: English
• ISSNs: 0016-7185

Abstract

Highlights: Critiques dualistic models of bank- and market-based financial systems. Argues for figuring financial markets in terms largely of interactions among banks. Shows that financial market activity is highly and increasingly concentrated. Questions role of "the market" as arbiter of economic and public policy practice. Abstract: The difference between bank-based and market-based financial systems is a longstanding and influential conceptual staple of the interdisciplinary literature on finance. This dualistic model has been subjected to wide-ranging critiques over the past decade. Yet, while those critiques productively problematize the relationship between banks and markets presumed by the model, they fail to address the underlying distinction between banks and markets that is also presumed by the model. This article questions that distinction. It argues that financial markets are best understood not as places or platforms where banks and other financial actors come to interact – and thus as essentially separate from banks – but, instead, as, in large part, their interaction; as constituted by it. The article further argues for the political as well as scholarly importance of reconfiguring our ideas of what financial markets are. The idea of markets as separate, reified phenomena not only underpins the scholarly model of bank- and market-based financial systems – it does political work in the wider world, with the appeal to financial markets or, more nebulously, "the market" to rationalize and justify political decision-making having become a commonplace of contemporary public policy discourse.