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F rance and the International Financial Crisis: The Legacy of State‐Led Finance
Author(s) -
Howarth David
Publication year - 2013
Publication title -
governance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.46
H-Index - 76
eISSN - 1468-0491
pISSN - 0952-1895
DOI - 10.1111/j.1468-0491.2012.01611.x
Subject(s) - securitization , financial system , financial crisis , state (computer science) , liberalization , business , financial regulation , quarter (canadian coin) , money market , finance , economics , market economy , interest rate , history , archaeology , algorithm , computer science , macroeconomics
Despite the far‐reaching liberalization of the F rench banking system over the past quarter century, F rench banks suffered far less in the international financial crisis (2007–2009) than banks in the U nited K ingdom and G ermany. However, the F rench system also suffered far more—at least in the first stages of the crisis—than the banking systems of S outhern E urope. By several measures, F rench banks were world leaders in financial innovation, and the F rench banking system was highly exposed to international market movements. The limited impact of the crisis, however, owed to the specificities of F rench “market‐based banking.” Deliberate state action over the two decades prior to the crisis created a specific kind of banking system and encouraged forms of financial innovation, the unintentional consequence of which was the limited exposure to the securitization that caused the damage wrought during the financial crisis.