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Not so global afterall? Varieties of liberalism & the 2008 financial crisis Sue Konzelmann, Director LCCGE International Research Network on VoL Birkbeck.

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Presentation on theme: "Not so global afterall? Varieties of liberalism & the 2008 financial crisis Sue Konzelmann, Director LCCGE International Research Network on VoL Birkbeck."— Presentation transcript:

1 Not so global afterall? Varieties of liberalism & the 2008 financial crisis Sue Konzelmann, Director LCCGE International Research Network on VoL Birkbeck Business Week London, 29 June 2011

2 International Research Network on Varieties of Liberalism London Centre for Corporate Governance & Ethics (Birkbeck) Centre for Analysis of Risk & Regulation (LSE) Centre for Regulation & Governance (Uni. College Dublin) Centre for Banking & Finance (University of North Carolina) College of Law & College of Business (University of Illinois) Critical Laboratory in Law & Society (York University, Canada) Centre for Law, Markets & Regulation (University of New South Wales, Australia) College of Business (Massey University, New Zealand)

3 Market capitalization & Cost of bank bail-outs Change ($bn) Bank bail-out package as a % GDP (March 2009) Canada % Australia % UK % USA % Source: Financial Times, 23 March 2009, p values are as of 31 May 1999; 2009 values are as of 17 March 2009; Stewart 2009.

4 Contemporary economic liberalism The return to economic liberalism Varieties of economic liberalism –Neo-classical liberalism: Britain & America –Pragmatic liberalism, akin to Ordoliberalism: Canada & Australia Variety stems from interpretation of theory and translation into policy –Private sector and the state; financial sector and the broader economy

5 The return to liberal capitalism The return to economic liberalism in the Anglo- Saxon world during the 1970s –US discontinues gold backing of the American dollar, leading to the collapse of Bretton Woods; –UK introduces policy of Competition & Credit Control and makes a Dash for Growth Reaganomics and Thatcherism –Shift in balance in favour of the private sector – finance in particular – relative to the state Pragmatic liberalisation in Canada and Australia –Liberalization accompanied by market friendly regulation

6 Early effects & responses to crises Australias corporate cowboys The American Savings & Loan crisis Canadian and British bank, insurance trust & investment house failures Looking into the abyss …

7 Financial market liberalization Financial Market liberalisation & regulation –US & UK: May day 1975 & Big Bang 1986 –Canada & Australia: incremental & prudential Britain & America: light touch regulation & return of global finance –London Euromarket –Framework of regulation: UK integrated & US diffuse Canada & Australia: Incremental liberalization & re- regulation –National branch banking system –Framework of regulation evolves into twin peaks

8 The structuring role of theory and policy, tempered by context Getting it right & getting it wrong? Ordoliberalism Varieties of liberalism & the crisis of contemporary capitalism Conclusions

9 International Research Network on Varieties of Liberalism London Centre for Corporate Governance & Ethics (Birkbeck) Centre for Analysis of Risk & Regulation (LSE) Centre for Regulation & Governance (Uni. College Dublin) Centre for Banking & Finance (University of North Carolina) College of Law & College of Business (University of Illinois) Critical Laboratory in Law & Society (York University, Canada) Centre for Law, Markets & Regulation (University of New South Wales, Australia) College of Business (Massey University, New Zealand)


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