Money and Finance Flashcards
Money as a social institution
It is an everyday object that we don’t consider its true meaning. Periods of monetary and economic crisis draw attention to fragility of money as a social institution. Much of our reliance on and obsessions with money rely upon the persistence of social norms and expectations.
Everyday experiences of Money
Rituals of conspicuous consumption and moneyed networks. It is a means of identifying class positions.
Everyday experiences of Money
To identify a nation, to identify the transformations of political and economic space in Europe. Bridges on notes represent connection, interchange and communication, Pan-European aspirations.
Everyday experiences of Money
Virtual finance and personal indentity
The end of Geography
O’brain (1992) predicted that globalization of monetary and financial institutions would herald the end of geography. Easy to assume that because of globalization, geography of money and finance is becoming less important
French et al 2009:289)
Money and finance does not just have a geography, it is inherently geographical, and money and finance have evolved as a technology for bridging space and time
What is the global financial system
Not to be understood as if it were some kind of machine, with own operating rules, uncontrollable by people but rather as a social, cultural and political phenomenon. Global finance is socially geographically and historically embedded.
the GFS 1. 1980s and 1990s a globalizating of money
the government and international institutions pursued neo-liberal ‘free market’ policies and encouraged deregulation of financial markets and liberalized folw of capital across national borders. 2. their was a rise of email and internet access with 24 hour trading
The GFS: localised centres of finance
really based in N America, Euripe and some parts of Asia. therefore many places are excluded.
Location
depends on type of financial institution and market. Specialized functions tend to agglomerate in large urban centres e.g. stock exchange.
Monetary Networks
Series of connections,- materials:computers, bits of paper, bank branches, telephones. - practices: talking to a bank manager, spans humans, technologies and things. Not one global financial system rather Multitude of Monetary networks
Monetary Networks and Agglomeration
International financial centres maintain dominance because their shear size is self-reinforcing.different time-zones and nature of industry promotes geographical concentrations. Agglomeration: finance, technology and labour.
Financial and economic crises
where networks go into meltdown as panic over losing finance and stock
Geographical expression
mortgages market, localized effects on financial centres and regional impacts of mergers and acquisitions. shifts in geography of financial centres.
Aalbers 2009:40
The financial crisis is redrawing the world in lots of ways and at many levels. Financial globalisation’s impacts are logically speaking global, but that doesn’t mean the impacts are the same around the globe.
Perceived causes
Frailties of human nature: irresponsible risk-taking by financiers. 2. Institution failures: financial markets and products too complicated to be regulated. 3. obsession with a false theory: markets are rational, logical and self-correcting. 4. cultural origins e.g.greek crisis 5. policy failure: too much regulation ,but on the wrong side.
Housing and mortgages market
mortgages lending used to be localised and national on scale. now part of a global market because if the savings are available in one area, but loans are needed in another. solution is to connect local markets and spread risks making mortgages markets more efficient by connecting them with other financial markets preceived as a low-risk investment
subprime Mortgages
A new geography of predatory lending and discrimination.NINJA mortages (no income, jobs of assets) 1. higher interest and fees than is required to cover the added risk of lending to borrowers with credit 2, abusive terms and conditions that trap borrowers and lead to increased indebtedness. 3.(intentionally) fail to take into account the borrower’s ability to repay the loan. 4. highest market shares among racially marginalized individuals and minority neighbourhoods.
securitsation
the process of creating new financial instruments by combining different types of assets and marketing them to investors. mortgage lender selling mortgages portfolios on the secondary markets to investors. which is how local and national markets went global. subprime mortgages viewed as a good investment
credit crunch causes
home repossessing, impacting neighbourhoods and bank default their loans. financial institutions stop lending to each other.
Mergers and Acquisitions
international centres took initial brunt of crisis. ultimately may lead to growing concentration and centralization of financial service activities within centres such as London HBOS.
New Financial centres
a shift in the geography of finance. credit crunch dint not lead to the fall of wall street. arguable crisis did accelerate trends towards a shift in financial centres; centres of increasing importance are to be found outside N. America and Europe. Rise of emerging economies, two of them backed by billion-people. shifting global balance, predicted that financial centres in asia will become more prominent.
conclusion
money has geographical, economic,cultural, social and political significance.GFS is geographically embedded comprising of networks that operate at different speeds and over different distances. finance and money, as well as the current crisis are redrawing the world in lots of ways and at many levels with unequal impacts on people and institutions.
