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Liberalism Varieties & 2008 Financial Crisis Analysis

Explore the impact of different liberal economic policies on the 2008 financial crisis. Analyze the influence of neo-classical liberalism, ordoliberalism, and liberal capitalism. Examine how the deregulation of financial markets led to crises in the US, UK, Canada, and Australia. Understand the role of theory and policy in shaping economic outcomes.

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Liberalism Varieties & 2008 Financial Crisis Analysis

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  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 Source: Financial Times, 23 March 2009, p.9. 1999 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 Australia’s ‘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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