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EUC Lecture Series: Banking on Markets: The Transformation of Bank-State Ties in Europe and Beyond

Event Type
Lecture
Topics
banking, economy, europe, finance, global economy, international
Sponsor
European Union Center, Illinois State University Office of International Studies and Programs
Location
1080 Foreign Languages Bldg., (Lucy Ellis Lounge), 707 S Mathews
Date
Mar 28, 2018   4:00 pm  
Speaker
Rachel Epstein, Professor, Josef Korbel School of International Studies & Co-Director, Colorado European Union Center of Excellence
Cost
Free and open to the public
Contact
Sebnem Ozkan
E-Mail
asozkan@illinois.edu
Phone
217-244-0570
Views
64
Originating Calendar
European Union Center Events

States and banks have traditionally maintained close ties. At various points in time, states have used banks to manage their economies and soak up government debt, while banks enjoyed regulatory forbearance, restricted competition, and implicit or explicit guarantees from their home markets. The political foundations of banks have thus been powerful and enduring, with actors on both sides of the aisle reluctant to sever relations.

 

The central argument of this lecture, however, is that in the world’s largest integrated market, Europe, the traditional political ties between states and banks have been transformed. Specifically, through a combination of post-communist transition, monetary union, and economic crisis, states in Europe no longer wield preponderant influence over their banks. I explain why we have witnessed the radical denationalization of this politically vital sector, as well as the consequences for economic volatility, policy autonomy and the future of the euro. The findings in Europe have implications for other world regions, which, to varying degrees, have also experienced intensified pressure on their traditional models of domestic political control over finance.States and banks have traditionally maintained close ties. At various points in time, states have used banks to manage their economies and soak up government debt, while banks enjoyed regulatory forbearance, restricted competition, and implicit or explicit guarantees from their home markets. The political foundations of banks have thus been powerful and enduring, with actors on both sides of the aisle reluctant to sever relations.

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