Journal article

Financialization, wealth and the changing political aftermaths of banking crises

Jeffrey M Chwieroth, Andrew Walter

Socio-Economic Review | Oxford University Press (OUP) | Published : 2020

Abstract

AbstractHouseholds face two politically salient risks associated with financial instability. The first risk, which has existed for perhaps centuries, is associated with the indirect effect of systemic banking crises on employment and income flows. The second risk arises from the direct effects of crises on asset prices and thus household wealth stocks. Historically, the second risk mainly affected only a narrow wealthy elite. We argue that the rapid expansion and financialization of middle-class wealth since the mid-20th century mean that many voters now have ‘great expectations’ regarding government responsibility to protect their wealth. The political risks of financial instability for inc..

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University of Melbourne Researchers