THE WELFARE STATE SOURCES OF BANK INSTABILITY: DISPLACING THE CONDITIONS OF WELFARE STATE FISCAL CRISIS UNDER PRESSURES OF MACROECONOMIC FINANCIALIZATION

The post‐financial crisis decision‐making of Britain's Labour Government represents an interesting case of the more general tensions embedded in welfare reform strategies under macroeconomic pressures of financialization. It continued to find additional sources of funding out of current taxation to finance enhanced levels of short‐term frontline services, yet this was always against the backdrop of attempting to facilitate greater long‐term affordability through negotiating the switch to increasingly self‐sufficient welfare citizens. These twin policy objectives provided the backdrop for New Labour's opposition to the Bank of England's post‐financial crisis arguments for forcibly separating banks' trading practices from their depository business. It was in this way that increasing welfare state sources of future bank instability became apparent. In Britain at least, attempts to juggle conflicting short‐term and long‐term policy priorities have resulted in the displacement of the most obvious manifestations of welfare state fiscal crisis into other areas of the public finances.