Moving Money Banking and Finance in the Industrialized World

Moving Money analyses the influence of politics on financial systems. Daniel Verdier examines how information asymmetry and economies of scale over time have created a redistributional conflict between large and small banks, financial centres and their peripheries, and he discusses how governments have attempted to arbitrate this conflict. He argues that centralized states have tended to create concentrated, internationalized, market-based and specialized financial systems, whereas decentralized states have favoured dispersed, national, bank-based and, with a few exceptions, universal systems. Verdier then sets out to uncover the sources, political and economic, of cross-country variation in financial market organization, examining 15 to 20 OECD countries from 1850 onwards.

Introduction; Part I. Theoretical Conjectures on Banking, Finance and Politics: 1. Capital scarcity, capital mobility, and information asymmetry: a selective overview; 2. The institutions of capital mobility; Part II. The First Expansion (1850–1913): 3. The advent of deposit banking; 4. The internationalization of finance; 5. The origins of corporate security markets; 6. The origins of universal banking; Part III. The Second Expansion (1960–2000): 7. Sectoral realignment; 8. The globalization of banking; 9. The growth of security markets; 10. Choosing the right product mix; Conclusion.

Daniel Verdier's book is an analysis of how politics influences financial systems. He shows that differing national political institutions have led to different regulatory policies and thus different financial structures. This book will be of interest to students and scholars of financial politics and political economy.

DANIEL VERDIER is Associate Professor in the Department of Social and Political Science at the European University Institute.