The end of finance / by Massimo Amato, Luca Fantacci.

Format:

Book

Author/Creator:

Amato, Massimo.

Contributor:

Fantacci, Luca, 1971-

Standardized Title:

Fine della finanza. English

Language:

English

Italian

Subjects (All):

Global Financial Crisis, 2008-2009.

Finance--History.

Finance.

History.

Physical Description:

xiv, 313 pages : illustrations ; 24 cm

Place of Publication:

Cambridge : Polity, [2012]

Summary:

This, new book by two distinguished Italian economists is a highly original contribution to our understanding' of the origins and aftermath of the financial crisis. The authors show that the ongoing financial crisis cannot be explained simply by reckless behaviour and the invention of risky new financial instruments: rather, it is rooted in a, much more fundamental transformation, taking place over an extended time period, in the very nature-of finance.

The 'end' or purpose of finance is to be found in the social institutions by which the making, and acceptance of promises are made possible - that is, the creation and repayment of debt contracts within a specified time frame. Amato and Fantacci argue that developments in the modern financial system by which debts are securitized have endangered this fundamental credit/debt structure. The illusion has been created that debts are universally liquid in the sense that they need not be redeemed but can be continually sold on increasingly extensive global markets. What appears to have reduced the riskiness of investment for individual agents has in fact increased the fragility of the system as a whole.

The authors trace the origins of .this profound transformation backwards in time, not just to the neoliberal reforms of the 1980s and 1990s but to the birth of capitalist finance in the mercantile networks of the sixteenth and seventeenth centuries. This long historical perspective and deep analysis of the nature of finance enables the authors to tackle the challenges we face today in a fresh way - not simply by tinkering with existing mechanisms, but rather by asking the more profound question of how institutions might be devised in which finance could fulfil its essential functions. Book jacket.

Contents:

Part I Phenomenology

1 Do we know what the financial markets are? 3

2 At the root of the possibility of crisis: Liquidity and risk 14

3 What is credit? 25

4 What is money? 35

5 Finance starting from the end 43

6 Capitalism and debt: A matter of life and death 53

Part II History

1 From credit risk to liquidity risk (2008) 67

2 The globalization of capital (1973) 76

3 'Fiat dollar'. And the world saw that it was good (1971) 88

4 The Eurodollar chimera (1958) 100

5 The European Payments Union (1950) 110

6 Bretton Woods: The plan that might have made it (1944) 121

7 Bretton Woods: The system that found implementation (1944) 133

8 The standard crisis (1929) 146

9 Orchestra rehearsal. The international gold standard and the dissolution of gold (1871) 159

10 Money before and after the gold standard (1717) 174

11 Money for nothing: The invention of central banking (1694) 183

12 The international currency of the trade fairs (1579) 197

Part III Politics

1 Double or quits? 211

2 The way out of liquidity: The Gordian knot and Utopia 221

3 Prevention or cure? The structural paradox of the anti-crisis policies 232

4 Another finance 242

5 The (rare) 'green shoots' of a possible reform 253

6 If not now, when? 268.

Notes:

"First published in Italian as 'Fine della finanza' : Donzelli Editore, 2009" --t.p. verso.

Includes bibliographical references and index.

ISBN:

9780745651101

0745651100

9780745651118

0745651119

OCLC:

760284613