Report
What is the “financialisation†of the economy?
There is often talk of the “financialisation†of the economy, mostly to lament it. But what does the “financialisation†of the economy entail exactly? W e look at the OECD economy . We believe there are three components to it: The fact that it is financial shocks that cause shocks in the real economy (cycles, recessions) and no longer the reverse, due to the sharp increase in the size of finance. The appearance of an abnormally high required return on shareholder equity, which helps to explain the skewing of income distribution, the offshoring, the corporate debt leverage and the resurgence of monopolies. The pointless transformation of illiquid assets (financial and real estate) into liquid financial products for savers, which gives rise to an excessive liquidity risk. If the financialisation of the economy does consist of these three mechanisms, then it is to be lamented.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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