Financialisation in Emerging Economies: Changes in Central Banking

Emerging market economies have undergone significant changes in their domestic financial systems since the 2000s, driven by the process of financialization. This has led to a massive accumulation of foreign reserves in these countries, with developed economies being the major beneficiaries. This book explores the trends towards financialization in emerging economies, focusing on the effects of reserve accumulation in their international and domestic spheres. It argues that reserve accumulation has been the catalyst of financialization and was exacerbated by the 2008 global financial crisis. The book also discusses how the US monetary policy normalization has added more complexity to these trends since 2013.

Format: Paperback / softback
Length: 188 pages
Publication date: 31 May 2023
Publisher: Taylor & Francis Ltd

Since the turn of the millennium, emerging market economies, often referred to as middle-income countries, have undergone significant transformations in their domestic financial systems. These transformations, driven by the process of financialization, have been shaped by the dominance of financial considerations in the conduct of key agents such as banks, non-financial corporations, and households. The emerging markets crisis that culminated at the end of the 1990s gave rise to a new phenomenon in global financial markets: a substantial accumulation of foreign reserves in emerging economies. This accumulation has had profound implications for the global economy, with developed economies being the primary beneficiaries.

Drawing from Marxist political economy, this book delves into the trends toward financialization in emerging economies, with a particular focus on the consequences of reserve accumulation in their international and domestic spheres. It argues that reserve accumulation has played a pivotal role in fostering financialization, as it reflects the subordinate position of emerging economies in the international monetary system. The chapters explore how these trends were further exacerbated by the 2008 global financial crisis and the extraordinary monetary measures undertaken by major central banks to address its effects.

Between 2010 and 2012, foreign investors poured substantial capital into emerging economies, resulting in a doubling of emerging-market financial assets since 2008. To conclude, the book discusses how the normalization of US monetary policy since 2013 has added complexity to these trends by placing pressure on emerging markets related to the level of global liquidity.

This book is an invaluable resource for students and scholars of finance, economics, and international relations, offering a comprehensive analysis of the evolving financial landscape in emerging markets.

Weight: 308g
Dimension: 233 x 156 x 15 (mm)
ISBN-13: 9781032075174