Finance-Led Capitalism (Shadow Banking, Re-Regulation, and the Future of Global Markets)

Finance-Led Capitalism is a lively and provocative read, challenging some of the core beliefs behind modern finance and our world economy. Its rigorous balance of theory and real-world issues will generate debate and prove a popular read for anyone interested in the topic.

Here bestselling author and economist Robert Guttmann provides a new conceptual framework to assess the dominate role of modern finance within the workings of our contemporary economic system. He asserts that the notion of finance-led capitalism captures two additional dimensions through which finance gets embedded in our economy: structural transformation and short-term 'hot money' flows. Central to the book is an in-depth focus on universal banks at the core of the financial system that have pushed their horizons beyond traditional indirect finance (e.g., taking deposits, making loans) towards market finance (e.g., securities trading, investment banking) and, more recently, network finance (e.g., shadow banking) in their relentless search for better ways to exploit scale, scope, and network economies. He argues that even though the 2008 financial crisis and subsequent re-regulation efforts have forced substantial reorganization among institutions and markets, global finance is still too concentrated, regulation-evading, and risk-prone for comfort. The book then offers practical recommendations, strategies, and solutions for developing a robust yet sustainable global financial system. Drawing from his own research into financial globalization, the author encourages international monetary reform by turning IMF-issued Special Drawing Rights into a true international currency, giving both creditors and debtors a meaningful choice.