(De)Financialization and crisis in Eastern Europe

Gabor, Daniela

Abstract

This paper investigates how financialization pressures in Eastern Europe shaped vulnerabilities to the 2007 global deleveraging and to what extent policy responses to crisis have sought to reinforce or delink from financialization. It explores the technical devices underpinning financialization, linked to the dominance of carry-trade strategies in foreign-owned banks and non-resident investors, validated by a set of central bank practices that changed the relationship between wholesale money markets and currency markets. Three distinct periods in the timeline of crisis show that central bank interventions were crucial in resuscitating financialization and that attempts to re-embed finance cannot be successful if public debt dynamics are neglected.

• Journal Article Type: Article
• Publication Date: Dec 1, 2010
• Journal: Competition and Change
• Print ISSN: 1024-5294
• Publisher: SAGE Publications
• Peer Reviewed: Peer Reviewed
• Volume: 14
• Issue: 3-4
• Pages: 248-270
• DOI: https://doi.org/10.1179/102452910X12837703615373
• Keywords: Eastern Europe, financial crisis, financialization, central bank liquidity management, quantitative easing
• Public URL: https://uwe-repository.worktribe.com/output/973095
• Publisher URL: http://dx.doi.org/10.1179/102452910X12837703615373