FinTech is transforming everyday financial knowledge and practice by developing ‘fun’, ‘entertaining’ and ‘aspirational’ dimensions. This paper develops three research themes about why making finance fun matters. First, the merging of social media as entertainment and as sources of financial advice is leading to the rise of an influencer economy, and these ‘finfluencers’ are shaping everyday financial practice that could generate new and unequal risk outcomes. Second, gamification techniques are being used to capture attention in digital finance to encourage certain financial habits while also shaping the business strategies of banks and fintech firms to enhance their intermediary positions. Third, the combined impacts of finfluencers and gamification in everyday financial practice could change how the children and youth markets are being engaged and mobilized in changing financial subjectivities. Taken together, these trends are shaping new FinTech economies with shifting financial norms and behaviour.

This exchange critically applies and extensively develops the “following the money” methodology, acknowledging that studies of money flows often miss the critical processes and practices that shape them. Following money constellations is my contribution to the debate about how to study money flows within the asset management capitalism. Beyond mapping them, I propose an analytical framework that includes a perspective on how and why the flows mapped are formed and are constantly evolving. The framework arises from the necessity to include qualitative work to uncover the evolving relationships between actors participating in a financial industry’s money flows. It embraces three analytical stages: the pooling of money from potential investors; the management routines and practices that shape investment preferences; and the deployment of money in particular assets. I end this first discussion with the necessity of putting this analytical framework under debate to develop a theory on finance in the field of financial geography.

The European Bank for Restructuring and Development (EBRD) is one of the least visible and most controversial regional development banks. Its unique features include its political mission to advance liberal market transition in countries committed to democratization, as well as an exceptionally large and diverse shareholder structure that comprises 71 countries (including US, Japan, China, and Hungary). As countries in its original region of operation – in post-communist Eastern Europe and Central Asia – have evolved into new political economic regimes, the EBRD accumulated a host of tensions in its operation. These tensions prompted the EBRD to establish a new ground for its legitimacy as it moved into a new region of operation into Egypt in 2011, after the Arab Spring. This paper provides a theoretically grounded explanation for the move of the EBRD, a regional development bank, into a new region of operation. Following the fall of the Mubarak regime, the EBRD, relying on its expertise in transitology, sought to establish its operation in a foreign geographical region. As a first step, it reviewed large companies from the Mubarak-era for their political commitment to the old regime. Based on this scrutiny, the EBRD granted only a limited amount of loans, mainly to the private sector. As Egyptian politics changed, however, the EBRD actively looked for a new legitimation base for its activities in an uncertain environment of the MENA region. Regional development banks are prone to operate in organizational fields. Lacking the expert authority and the support of great powers of the World Bank, regional development banks seek to build a network of development banks, commercial actors, and public authorities to strengthen their operation’s impact. According to organizational field theory, large and complex organizations in an uncertain environment will mimic the behaviour of organizations that they perceive to be more legitimate and successful. Consequently, the EBRD in Egypt was both actively seeking connections with other development actors, and prone to mimic the operational logic of the development finance field. Since 2014, inside the EU, a development finance field has emerged with the EIB and national development banks at its core. Since 2015, this development finance field started dominating the neighbourhood policy of the EU towards the MENA region. Financed by member states and the EU’s newly established funds, the EIB and national development banks of core countries channelled financial resources and technical expertise to Egypt. The EBRD moved closer to this new field of European development finance and embraced its logic of supporting sustainable infrastructure to combat climate change, promoting public investment, and countering Europe’s geopolitical rivals in both Egypt and elsewhere in the MENA region. Since 2015, the EBRD has been both imitating European development actors and relying on its own expertise. It offers capacity-building and technical assistance projects to the Egyptian state. It has also reorganised its own loan portfolio to support PPPs (many of which it classifies as private investments), projects of well-connected private companies, and the development of public infrastructure. At the same time, the EBRD has become a valuable partner of the authoritarian Sisi government as most of its financing is related to the megalomaniac Vision 2030 of the Sisi administration, which includes new ports, a new Cairo city, and related infrastructure. In this transformation of EBRD practice, the Bank has retained its emphasis on liberal market conduct capable of curtailing corruption and ensuring the freedom of market actions. Nevertheless, the EBRD has also become a critical link between global capital market investors and the authoritarian regime in Egypt disregarding its original mandate. The sweeping ease of the EBRD’s commitment change is a warning to the global development finance community to maintain democratic control over their practice while embracing new goals in new regions of operation.

Given the emphasis on ESG in the media and among the finance community one could easily believe that capital markets are a major contributor to the goal of limiting global warming. We argue this perception is largely false; a narrative strongly pushed by the finance industry to highlight green initiatives and in so doing, block further (potentially profit-reducing) regulation. The basic economic idea behind green or sustainable investment assumes that “green” investors derive utility from both, the financial gains they earn holding the firms’ shares, and from the positive social or environmental impact of these firms. For instance, investors could start buying shares of wind farms, despite the fact that they are less profitable than coal-burning energy firms. The wind farms would then experience a (one-off) share price increase which is associated with lower financing costs, allowing further green investments. Investors would happily accept lower financial returns. We analyze the ESG investment process at the micro level: Households are ultimate investors that use some sort of financial intermediaries, such as banks, or mutual funds. These in turn use ESG ratings either produced inhouse or from rating agencies to inform their investment decisions. They then give loans to firms, or buy shares or bonds from firms to deliver (mostly financial) returns to the ultimate investors and to earn their fees. The newly acquired green funding allows firms to change their behavior – e.g., reduce their CO2 footprint in production – and thus help mitigate global warming. Recent research has found, however, that this process is broken in various places. Many green investors are less interested in the impact of their investments in terms of CO2 reduction, but more in the good feeling derived from investing in green assets (“warm glow”). Authors from the Hong Kong Monetary Authority have asked, “How much is the world willing to pay to save the Earth?” and concluded, “Sadly, not much”. For instance, there is little difference between the returns of green and traditional bonds on average. Green is allowed to hurt a little, but not much in terms of financial returns. Asset managers love to label their funds “green” or “sustainable” – because this ensures higher demand and higher fees for otherwise mostly identical funds. As an insider put it, one firm “reports externally that a large part of the investments are in ESG-compliant investment strategies, but explains internally that it is only a fraction. […] The sustainability propaganda and rhetoric of [the firm], but also of other financial institutions, got completely out of control.” Rating agencies are central to the ESG investment process as they are a key source of information for creating investment products and for making investment decisions. However, their ratings of the same firms differ widely, and what they measure is mostly the risk the firms experience from future regulation, not the risk that the earth’s climate experiences from further operation of the firms. Finally, green investments only make a difference to climate change if the investment would not have been done without the green funding: If a new refrigerator is environmentally better than the old one and pays off by saving money due to lower energy consumption then a firm will buy it, no matter whether the funds used are labeled green or not. This “additionality” is key as the green funding needs to cause environmentally friendly activity, or otherwise nothing changes. Based on close to zero return differences to conventional products, not much impact on the real world can be expected. As a result, green finance is more accurately seen as a source of additional fees for the finance industry rather than a means of actual CO2 reduction (or similar good things for the environment). However, few of the people involved seem to care: Investors feel good, ESG rating agencies come into being and flourish, accountants, commercial and investment banks, asset managers etc. prosper, companies get (slightly) cheaper funding and a better image. Regulators are busy, politicians can showcase action and change, and last but not least, business schools are able to offer green investment classes, heart-warming case studies and a good conscience. Everybody is happy. Only one thing is decidedly unimpressed: the earth’s temperature, which continues to rise. We should stop waiting for the capital markets to do their magic with “sustainable finance” and instead focus on regulating firms’ actions and emissions directly.

The literature about financial geography is largely defined by three parts: financial geography (general), distance relations in banking, and location analysis of commercial banks. Two important parts of financial geography are, however, rarely discussed in their relationship to each other: financial centers and monetary policy. This paper is devoted to an analysis of the literature and important points on the relationship between monetary policy and regional science. This literature review shows the importance of monetary theory for regional development, and the importance of spatial effects on monetary policy. The working paper focuses on these two issues, which are usually are ignored in empirical analyses. The interest rate channel hypothesis assumes an increase in the cost of borrowing. The equity channel of monetary policy works through a wealth effect triggered by decreased interest rates. As the literature suggests, we should search for other reasons for these types of asymmetries. An interesting conclusion from reviewing all these studies is that a different industry mix across regions is the only convincing explanation for regional asymmetric responses to monetary policy shocks. In contrast, a traditional effect through a credit channel, possibly operated at the national level, is not reflected in the regional asymmetries.

Some people might consider the ‘brick-and-mortar’ bank branch to be an obsolete concept destined to become extinct. Almost every decade, it has been predicted that technology will render the physical presence of banks unnecessary. However, the bank branch has yet to be replaced as the primary source of soft information with an intrinsic spatial dimension. In addition, the bank branch often fulfills other important roles aside from its core function, since it contributes to the accumulation of regional social capital or the physical manifestation of financial inclusion drawing attention to uneven geographical development. The bank branch still represents an important distributional channel, the closure which can have severe consequences for the local economy. In our working paper, we argue that to understand better the heterogeneous impact of bank network structure on the local economy, one must examine the deviations from local equilibria. Our main variable of interest is the cost of debt of SMEs, approximated by the effective interest rate calculated from firms’ financial statements. To study the nonlinear relationship between local credit market structures and SMEs’ costs of debt, we focus on the Slovak banking system because of a few of its distinct features. Figure 1 shows the change in the total number of banks across Slovak LAU1 regions between observed time periods. To investigate the nonlinear effects of access to finance via a ‘brick-and-mortar’ bank branch-network, we adopt a two-step approach. In the first step, we construct an empirical model of bank branch localization that allows us to calculate fundamentally driven optimal levels of credit market saturation. We use a panel data model with random effects and bootstrapped standard errors. Determinants of this optimal level are drawn from the literature on bank branch localization. In the second step, we separately investigate the effects of positive and negative deviations from the optimal level of market saturation (under- and over-branching) on the costs of firms’ bank debt. In addition, we analyse the specific features of SMEs that are associated with the most severe effects of limited access to finance and the qualitative characteristics of banks that could potentially mitigate the consequences of the ‘too-much-branching’ phenomenon. We again employ a panel data model with random effects and bootstrapped standard errors. From an econometric point of view, the two-step approach also has the advantage of mitigating the effect of potential endogeneity in the presence of the changing nature of the underlying bank network structure. Our results reveal several important findings. First, we find that the bank branch-network size affects the costs of SMEs debt unequally depending on the level of credit market saturation. Firms mostly affected by such a nonlinear relationship, located in under-branched regions, are usually medium-sized, with domestic ownership and operation in low-tech industries. Conversely, in over-saturated markets, bank characteristics gain importance as the source of competition in quality rather than sheer expansion of the bank network. Finally, we show that while the spatial structure of the bank branch-network in Slovakia reflects standard socio-economic factors, the role of geographical elements remains unsubstitutable.

Financial nationalism is on the rise. Countries ranging from the United States, Russia, China, and Taiwan, to Bolivia and Hungary embrace financial nationalist policies although to varying degrees. For scholars, a core intellectual puzzle is to explain these governments’ sustained capacity to pursue financial nationalism in an era when the interconnectedness of global financial markets surpasses any historical level. Financial nationalism is puzzling because of its capacity to redistribute gains from international financial transactions among a larger share of domestic society. This paper, using the example of Hungary, identifies financial nationalism’s unexpected achievements through contrasting it with claims of three theories of financial power: structural power of finance, financialization of state institutions, and financialization of everyday life. Specifically, it documents the Hungarian government’s achievement to increase domestic ownership of banks, to – importantly – enlarge the scope of central banking, and to significantly reduce the credit exposure of a large segment of the Hungarian population. However, this paper also describes an underemphasized critical condition of financial nationalism’s advancement, at each examined policy domain, namely the diminishing democratic oversight of major financial transformations. Exposing the details of bank domestication, the corrupt conduct of the central bank, and the unchecked spread of informal money lending among the poor, the paper argues that financial nationalism as it is pursued in Hungary weakens the capacity of democratic institutions. The domesticated banks controlled by oligarchs, provide financial support for such investment that increase government’s control over the media, curb academic freedom, and increase political dependencies of business actors. It also builds up financial hierarchies among the poor in villages by constraining their freedom to vote at municipal and national elections. Finally, the Hungarian example does not suggest that financial nationalism inherently leads to a democratic decline, but that financial nationalism’s many impressive economic achievements should be understood within its political context.

Among the features of a global agenda centred on a finance-philanthropy-development nexus is a collaborative approach to advancing digital financial inclusion. The digital form of financial inclusion builds on earlier development interventions centred on microcredit and its more expansive version: microfinance. While these earlier interventions came across as grassroots initiatives to counter the exclusionary nature of national financial systems, they quickly became mainstream. This process of mainstreaming is reflected in the Sustainable Development Goals for 2030 — in which financial access is repeatedly mentioned — and has largely been pushed by the Consultative Group to Assist the Poor or CGAP. This institution has operated out of the World Bank headquarters in Washington D.C since the 1990s and describes itself as a partnership of more than 30 leading development organizations, the Bill and Melinda Gates Foundation, Credit Suisse, KfW, and the United Nations Capital Development Fund. Through extensive commentaries on financial inclusion strategies including data analysis, and by formulating guidance on regulation and standards, the CGAP has been instrumental in making financial access for the poor an integral part of national and global development agendas as well as the global financial architecture. The close connections between microfinance institutions in developing countries, global philanthropic foundations, and the international asset management industry thus reflect and arrangement in which philanthrocapitalists have taken on the responsibility of funding the borrowing needs of the poor. The success of the CGAP offers a template for other organizations based on global partnerships to target developmental goals. The provision of legal identity for all, including birth registration is one such target, articulated in Goal 16.9 of the SDGs 2030. For this, the World Bank has led another project; the ID4D initiative, that frames digital identification technologies as having transformative potential for poor countries. The objective of this initiative is to utilise private-partnerships to establish digital identification systems for the delivery of basic services to the poor. At the core of this strategy is the ID4D Multi-Donor Trust Fund. Established in 2016, it is supported by several organisations including the Bill & Melinda Gates Foundation, Omidyar Network and the Australian Government. Critical scholars are apprehensive about various aspects of the wider digital identity project; primarily about the right to privacy, but also on inequalities driven by race, ethnicity, and gender. These echo earlier concerns associated with financial inclusion strategies, particularly because indebted poor people regularly become income streams for large financial institutions. As such, financial inclusion strategies are often a form of financialisation; and like other forms of financialisation they replicate inequalities. Because the relationship between financial access and digital identity has tightened, it has become easier for large financial institutions and technology companies — or fintechs — to monetise digital footprints of those who use digital technology for financial transactions and also to access welfare and other government services. This relies on what fintechs call a ‘Stack model’ and advances what has been described as digital financialisation. My argument is that security, and not just financialisation, is the appropriate lens to examine technologies for financial access. Whilst endorsed by the nexus of finance, development, and philanthropy — ostensibly to facilitate welfare policies — such technologies are also part of a global security imperative. This is perhaps best reflected in the objectives of the Financial Action Task Force or FATF, which is a G-7 body that seeks to counter terror finance and money laundering. Examples from India and Pakistan show how such strategies drive collaborations between governments and fintech companies that complicate policy transparency

The 2008 Global Financial Crisis (GFC) has led to a renewed interest in finance, financial instability, and financialisation among geographers and heterodox economists. In this context, capital flows, i.e. financial transactions between residents of different geographical units, have received attention for their potential role in geographically uneven economic dynamics such as local financial booms. In debates on the GFC and the Eurozone crisis, capital flows were associated with current account imbalances, whereby regions with export surpluses such as East Asia and the core Eurozone countries sent capital flows into deficit countries, where they contributed to over-leveraging and asset price bubbles. Similarly, capital flows have been linked to boom-bust cycles and a subordinate form of financialisation in the Global South. This paper embraces the view that capital flows can be destabilising but argues that previous work has often left unspecified which types of capital flows impact trade, credit, and asset prices, and through what causal mechanisms. There has been a tendency to simply refer to aggregate capital flows without distinguishing between pure gross financial flows and trade-related net flows, and between different types of flows, such as bank and portfolio flows. This is a shortcoming because many gross financial flows are hidden in net and aggregate measures, despite being a potential source of destabilising dynamics such as asset price bubbles. The paper aims to provide insights into the nature and role of gross financial flows in geographically uneven economic dynamics. Applying a monetary perspective to an international setting, it draws on the theories of endogenous money creation, asset pricing through portfolio choice, as well as Hyman Minsky’s theory of financially fragile balance sheets. The paper utilises coherent balance-sheet accounting to show how capital flows can be tracked between different geographical spaces. Three main arguments are made. First, trade deficits in a specific region usually are financed endogenously by bank flows that do not have to originate from surplus regions. The focus on net capital flows in much of the previous literature draws attention to surplus regions such as China and Germany, which detracts from financial centres in deficit regions such as New York and London as originators of flows. Second, flows from risk-hungry investors in such global financial centres can indeed drive locally destabilising financial dynamics, but there is no reason to expect loan inflows to do so. By contrast, deposit, portfolio, and FDI flows can directly stimulate exchange rates and domestic asset prices, calling for a more careful distinction of different types of gross flows (Figure 1). Third, gross sudden stops in capital flows can be entirely unrelated to current account deficits but may trigger Minskyan financial instability resulting in negative gross flows rather than outflows. With respect to policy debates, the regulation of international capital flows should therefore not be confined to bank flows and also consider speculative flows into local assets such as real estate.

China’s global ambitions are being expressed, among others, by its huge infrastructure project ‘Belt and Road Initiative’ (BRI) and the internationalization of its currency, the renminbi (RMB). An element that serves both ambitions is the global expansion of Chinese banks. This paper examines the expansion strategy of Chinese state-owned commercial banks (SOCBs), mainly into Western Europe, which also form essential parts of their bank networks across the globe. Here, we pay particular attention to the anchoring of Chinese SOCBs in Luxembourg. So far, little scholarly attention has been paid as to how and where China established the headquarters of these bank networks, and whether and why they have chosen the legal forms of branches or subsidiaries over the other. Surprisingly at first sight, Luxembourg’s international financial center hosts the largest number of headquarters of China’s banks in the European Union, and it funnels more than 40% of China’s foreign direct investments (FDI) into Europe. This paper examines the organizational model of Chinese banks in Luxembourg to explain how (Chinese) global banking networks are constituted, and how these global banks’ expansion strategies interact with strategic entry points in Europe. The paper hence makes two major contributions: First, and although this does not only apply to Chinese banks, all Chinese banks in Luxembourg are organized in a specific branch-subsidiary structure. In this setting, branches operate within Luxembourg’s borders, while subsidiaries are governing bodies from which a network of sub-branches across the EU is managed. Luxembourg’s specialization in the cross-border investment fund industry, its pool of experts, and expertise in utilizing Luxembourg’s suitable regulatory framework for foreign banks, attracted Chinese SOCBs to cluster. We argue that the (often overlooked) importance of the branch-subsidiary organization is one key contribution of the paper. Second, we find that although Chinese banks have established similar headquarters in London, Luxembourg is now the leading center for cross-border investments with exposure to China’s securities markets and RMB bond listing. Luxembourg’s pre-eminence in these areas provides the foundation to potentially become a leading financial center of the future and a privileged entry point for Chinese public and private investors into Europe. However, we argue that Luxembourg may also serve as the reverse and become a similarly important entry point for foreign investors into China in the future.

The recent social unrest in Hong Kong, which began in 2019, has reignited debates about Hong Kong’s future as a financial brokerage between a transitional China and the volatile global economy. Some claim that Hong Kong will inevitably lose its bridging role with mainland China as a financial center, while dissenters take a clear-cut stand that Hong Kong’s status will remain irreplaceable. From a financial geography perspective, it is key to firstly have a comprehensive understanding of Hong Kong’s bridging role in global financial activities. Applying the framework of the global financial network, this paper aims to propose some novel shreds of evidence for understanding Hong Kong’s bridging role with the perspectives of Chinese firms’ overseas listings on the US stock market. According to our results, Hong Kong’s status as a brokerage city for overseas listings of Chinese firms is twofold. First, it is a successful financial center with well-developed global networks of financial and business services (FABS), which are mainly forged by the historical legacy of the British colonial era and the economic globalization driven by multinational corporations since the 1980s. Second, Hong Kong’s role as offshore jurisdiction makes it a strategic gateway for mainland China to raise capital globally. With the evolving dynamic of global financial networks, Hong Kong will continue to be of vital importance as a brokerage city that smooths China’s integration into global financial networks.

The constitutive importance of space to money and financial relations and practices has been widely documented by financial geographers of multiple theoretical inspirations. Taking critical stock of this bourgeoning field, our paper proposes an analytic of ‘borders’ as productive way to engage with the various entanglements between money and space/s. Rather than entering conceptual controversies on the term, ‘border’ is here used writ-large, as useful heuristic device to disentangle, yet hold in analytical tension, multiple modes of money and finance dealing in borders, processes of bordering and de-bordering, but also multiple forms of boundary making and re-making, inclusion and exclusion, fringes and frontiers. This means of course paying attention to the geopolitical borders and regulatory spaces, showing how global finance is rooted in the contemporary architecture of states and international relations. But it means also attending to how lines in this cartographical space of geopolitical borders are rearranged, stretched, inflected through multiple ways in which finance “takes place” and connects specific sites more than others. Within and across geopolitical borders, finance demands and materializes differential forms of connectivity, from networked financial centres to the indebted bodies in so-called subprime areas. This is thus a reading where the ‘plumbing and wiring’ underpinning the seemingly frictionless global space of finance is always in critical tension with its margins, edges and fringes, not simply as risky, or ‘unbanked’, but as sites where bodies, monetary practices and social forms are constantly targeted and refigured as new frontier markets awaiting novel forms of accumulation.

Financialization as a global process can take on specific forms in economy with a state that has signs of authoritarianism. In Russia the state-led financialization has been taking place largely through the domestic banking sector and the realm of “digital financialization”. It manifests in growing financial inclusion, digitalization, remote access, non-cash payments and expansion of debts of households and firms. In our paper, we discuss three interdependent processes (or, rather, in the three aspect of the same process), which are defining parts of the state-controlled “financial vertical”. These are: concentration — an increase in market share and importance of the largest banks vs. medium and small banks; geographical centralization — an increase in market share and importance of Moscow-based banks versus regional banks; nationalization — an increase in market share and importance of state-controlled banks and other financial institutions vs. private banks and banks with foreign capital. Sberbank, the main Russian state-controlled bank, which holds a super-monopoly position, characterizes these processes well. Its share in the banking system assets is increasing and approaching 30% and of all banking branches almost half are Sherbank’s. Several other large, mainly also state-controlled banks and banking groups paint a similar picture. This institutional structure creates an almost total state dominance in all segments of the financial sector with a lack of diversity and competition, especially for clients on regional financial markets outside Moscow. As a result, despite clear signs of financialization, many key segments of financial markets remain underdeveloped. “Digital financialization” is the aspect of financialization in which the state supports the development and encourages the application of new technologies to permeate markets. The development of non-cash payments and digitalization facilitate the state’s ability towards surveillance and transparency of economic agents, create additional income for the largest banks, most of which are state-controlled, and generally further the logic of the state “financial vertical”. New technologies are actively used by the largest state-controlled banks to crowd out smaller, private and regional financial market institutions. The lack of competition and the distorting influence of the state are reasons why economic agents in such an economy may ultimately have limited access to financial resources and limited possibilities to save and invest. High costs of financial resources and services against the background of high profitability of the largest banks are now the reality in Russia.

The relationship between governmental economic policies, the international strategies of banks, and firms’ internationalization is an intriguing phenomenon which is not yet fully investigated by financial geographers. Our paper analyzes the geographical patterns of Italian banks’ international network in order to answer the following research questions: 1) What are the main strategic choices driving Italian commercial banks towards the international markets?; 2) How are they related to strategic choices of the Italian government?; and 3) how do they impact the parallel processes of firms’ internationalization? We integrate economic geography, political geography and management studies within the conceptual framework of “geofinance/geobanking” (Sellar, Grandi and Jafri, 2019). We find that large Italian banks followed two main strategic international organizational processes: mergers & acquisition (M&A) by international groups, and the M&A by clustering among Italian banks. Middle and small banks adopted less expensive and lower risk international strategies, including proximity expansion, finance city focus and exploratory expansion. Given the constant increase of trade flows and internationalization of Italian firms, we hypothesized a direct causal relationship between firms and banks’ internationalization. However, our study shows that there is an incomplete overlap between the locational choices of banks and firms going cross border and that public policies also should be considered when studying this phenomena. In conclusion, adopting the perspective of geofinance/geobanking, we demonstrate that there is a visible, but weaker than expected, connection between Italy’s policies, bank strategies, and firms. Banks choose their international strategies in response to a larger variety of criteria, including autonomous sectoral growth, diversification strategies, and the willingness to co-locate into international financial centers – both established and emerging – as well as the behavior of the host governments. References GRANDI S., SELLAR C., JAFRI J., (eds) (2019), Geobanking between political and financial geographies: a focus on the semi-periphery of the global financial system, Edward Elgar Publishing, UK

Some academics and economic commentators have argued that we are living in an age of ‘de-globalisation’. Given a looming no-deal Brexit and the lunacy of the Trump presidency—especially considering their impacts on international trade, regional integration and global governance—this view is not too far-fetched. However, the de-globalisation argument draws heavily on a (Global North) rich-country perspective and focuses on trade flows. If we shift our viewpoint to emerging economies (EMEs) —that is, those countries that have experienced an economic transformation, for instance from planned to market economies or from low-income to middle-income status— and financial flows rather than trade a very different picture arises. Since the financial crisis, economic development in EMEs has been shaped by financialization, meaning by the structural transformation of financial markets through which production of goods and services loses out or becomes subordinated to financial accumulation. While it is generally acknowledged that financialization takes on a different and distinct form in the Global South, I argue that it is importantly variegated within this country group, that is, across EMEs. To help identify the determinants of this variegation, the paper discusses financialization with respect to nine dimensions on three geographical scales: the urban (or city) level, the nation state and the international scale. These financialization dimensions are: (1) financial liberalization, (2) financial globalization, (3) the presence of globally operating companies, (4) the financialization of the financial sector, (5) non-financial companies (NFCs), (6) households and (7) the state; as well as (8) asset price inflation and (9) the existence of financial centres. In this way, links are created across important financialization research strands, especially economic geography, political economy and heterodox economics. Thus, the paper takes stock of the structural and spatial variegation of financialization in 20 EMEs, by reviewing the phenomenon on the international, state and city level. When comparing measures of financialization in EMEs, we observe a strong degree of variegation across but also within regions. The table provides the nine dimensions of financialization for 20 EMEs, showing relative positions through colour coding. Values ranked within the top quartile of an indicator are highlighted in black, symbolising a strong degree of financialization. Positions in the second quartile are highlighted in dark grey, while the lower ranks are represented in light greys. The least degree of financialization for a given indicator are marked in off-white. The UK and US are included as points of reference.

The concept of economic resilience finds its roots in resilience thinking in ecology. As a result, much of the resilience literature tends to assume that sectoral and regional resilience are determined by the characteristics of regions and sectors such as their productivity, their labor skills or their policy regime. In this paper, we take a different approach and postulate that under certain conditions, the resilience of industrial sectors, and indeed whole socio-economic systems, can be reflexively tied to the agency and power of lead firms. We substantiate our argument through an in-depth study of the role of Goldman Sachs, a leading US investment bank, in shaping the resilience of the US financial sector in the lead up to, during, and out of the global financial crisis. We present our analysis for three key periods. In the first part, we show that Goldman’s pre-crisis rise to prominence (1999 to 2006) is linked to the firm’s strategic move to aggressively securitize and trade in the booming US real estate market. As such, Goldman Sachs contributed significantly to the build-up of systemic market risk. Evidence suggests that in 2006, when legislators, regulators and the rest of the US securities industry seemed fast asleep at the wheel, Goldman showed remarkable foresight in spotting early signs of the imminent collapse of the US real estate market. As a result, the company was swift to offload much of its exposure to subprime securities in a move that would spark much controversy on the legality and morality of investment bankers selling securities they deem worthless. Although Goldman’s intuition proved to be right, the firm nonetheless underestimated the interconnectedness of the US financial sector. Following Lehman Brothers’ bankruptcy, Goldman’s fate, not unlike a number of other globally-systemically important financial institutions, came to depend on government agencies. Building on multiple sources of evidence, the second part of our analysis (2007 to 2009) focuses on revealing the deep interconnections between Goldman Sachs and policy-makers and regulators and the significant agency of the former in negotiating the latter’s crisis-response. We document Goldman Sachs’ role in these negotiations and show the firm’s tireless efforts to promote its interests and steer regulators and government agencies to avoid both failure and reforms. Although Goldman made every possible effort to distance itself from the idea that it was bailed out, we show that it was one of the largest recipients of government aid. In the third part of our analysis (2010 to 2017), we document and analyse Goldman Sachs’ post-crisis corporate reorganization. We show that since the crisis Goldman has become even more global and diversified. Today, its extensive network of 61 offices spans every corner of the globe including all the leading global financial centres as well as emerging financial centres focused on mid- and back-office operations as well as technology, such as Salt Lake City and Bengaluru. The latter locations are becoming core strategic locations for the firm’s global operations; we discuss this geographical shift in light the technological intensification of the sector. Overall, our analysis sheds light on the role of lead firms in the process of negotiating an economic crisis with reference to firm level strategic management and lead firms’ agency in influencing their political and regulatory milieu. Our results show that Goldman Sachs did not come out of the crisis unscathed or unchanged; yet, they also suggest that its staying power is as much due to its ability to adapt to a changing environment as it is to its capacity to shape it. Ultimately, our analysis implies that Goldman Sachs’ efforts to ensure its own survival had wider consequences for the survival of other key companies in the financial sector and by extension the resilience of the financial sector as a whole.

Financial geography is often understood as the geographies of money and finance, but in my approach financial geography is a lens that can be applied to a range of topics, in this case real estate and the city. Real estate is not only central to the reproduction of the current highly financialized system (both as a form of collateral and a source for private consumption), but it also is its weak link as real estate markets have been turned into Ponzi schemes. A number of lessons from financial geographies of the city can be drawn regarding the temporality and spatiality of financializing the city. Firstly, the financial crisis that started in 2007 has not resulted in an overall definancialization of the city. In some places it appeared to be a bump that had to be overcome and as a case like Ireland suggests, the ‘solution’ to the crisis of financialization was predominantly to implement financial instruments and favour financial rationales and actors in more rather than fewer domains. Austerity urbanism was rolled out in many places. This is not simply continuing or furthering neoliberalism, but is implemented through more intensified financialization of urban governance and lives. Despite a number of common trends, the experiences of real estate and urban financialization are variegated. But it would be too easy to conclude that the financialization of land, housing and real estate is exclusively a Global North phenomenon. For example, the literature on financialized state strategies that favour real estate development and investment are primarily coming from middle-income countries that are typically seen as part of the Global South, such as Latin America, the Middle East and East Asia. Finally, the literature of the financial geographies of the city has highlighted both the commonalities and differences between the contemporary treatment of land and financial assets, residential and commercial real estate, public and private/privatized—and entrepreneurial and financialized—urban governance; within both Global North and Global South, and both urban and rural contexts. The literature also notes an emerging gentrification-touristification-financialization nexus. The role of the state, and the local state in particular, in all of this is variegated and often ambiguous, and will—no doubt—be the topic of future studies applying a financial geography lens to study land, housing, real estate, infrastructure and urban governance. Read the full paper here.

A decade on from the financial crisis, it has become common practice to look back on what has happened since. Much of the focus has been on the regulatory response towards systemically important financial institutions who are too-big-to-fail. However, another group of systemically important actors has received less attention: financial markets infrastructure (FMI). Commonly referred to as the financial “plumbing”, FMI is the backbone of the global financial system, yet to-date has received little attention from financial geographers. It comprises functions and services such as clearinghouses and securities depositories as well as processes and systems for payments, clearing and settlement. In our paper, we focus on the ‘mundane’ yet highly profitable and strategically important area of payments. In so doing, we zoom in on a singular and crucially important actor, the Society for Worldwide Interbank Financial Telecommunication (SWIFT). SWIFT is perhaps best known for the old names of the bank codes used in international payments. Such payments are underpinned by the correspondent banking system, a means by which banks provide and access services in other jurisdictions via banks in those locations. This system constitutes a historical fundament of the network of IFCs dating back hundreds of years. While the logic of this system hasn’t changed since, the Eurodollar-enabled expansion of Western banks in the 1970s raised a need to more efficiently deal with the increased volume of transactions. SWIFT was thus formed as a co-operative by banks to accomplish this and is now the near-monopoly provider of financial messaging for payments. As SWIFT’s genesis is inextricably associated with cross-border payments and this still forms the core of its business, one of the things we do in our paper is to examine closely how such payments work. We use global production networks (GPN) to look ‘under the hood’ of an international, or more accurately, a cross-currency payment. Doing so allows us to see the network of actors involved, but also to consider the significance of where global economic activities occur. SWIFT’s role as both intermediary between financial actors and infrastructure for the global financial system makes it more than a mere passive facilitator of economic activity. Its governance system is weighted in favour of its heaviest users—Western, and in particular US, banks—and its embeddedness in particular locations make it subject to political influence. This is evident in some controversies that SWIFT has been involved in, for example, its ‘weaponization’ in imposing sanctions on some states at the behest of others. Hence, because SWIFT is a key infrastructure provider of global geo-political and geo-economic importance, we show how SWIFT forms a carefully crafted socio-economic system in itself, which can also be defined as an intermediary in the GPNs of finance. The strategic importance of FMI has lately become more apparent to politicians, and in our working paper, we make the case too for financial geographers to examine infrastructure actors’ role in shaping the architecture of the financial system. Read the full paper here.

The motivation to write this paper was twofold. In part, it was personal curiosity. Between the two of us, we have lived in several tax havens, including Bermuda, Luxembourg, and Panama. As one might assume, the day-to-day economic activities of these places differ considerably from those in the rest of world. Their high-rise office towers most often contain banks, but not the sort that one would normally open an account with. In Bermuda, most residents have some tie to the captive insurance industry; Luxembourg’s ‘fiduciaries’ occupy prime real estate near the city center, but are often characterised by vacant offices; Panama is reputed to have more lawyers per capita than New York. As geographers, our intellectual curiosity led us to investigate these places in further depth. The second reason we wrote this paper was to apply network analysis to understanding the interrelatedness of tax havens. Law firms, banks, and other advanced services providers often pride themselves on offering a broad range of services (e.g. brokerage, domiciling) through a network of local affiliates. Panamanian firms might have affiliates or branch offices in Luxembourg, just as Irish firms may have offices in Jersey or Bermuda. The figure below illustrates this point based on common law firms in the ‘Bermuda Triangle’. Just as ‘mainstream’ producer services are networked through world cities (e.g. New York, Hong Kong), there is a parallel network of places within the global financial circuitry that is perhaps equally well connected. These relations, in this case proxied by common services offered by firms, were the topic of our paper. We used network analysis for the simple fact that we conceptualised the complex set of relationships between offshore financial centers as a network. As tax havens are by definition multi-national operations, we took common services as the ‘link’ between two places. For example, if both Liberia and Panama specialise in ship registry, as they do, it was assumed that there must be a common link between them, which could take the form of information sharing, common legislative frameworks, etc. The findings run counter to the narrative that tax havens are ‘rogue’ operators. The most central sub-network grouping (the Netherlands, Ireland, Luxembourg) finds itself within the European Union, and many of the most significant tax havens are British Crown Dependencies and Overseas Territories, rather than autonomous island nations. Another interesting finding was the existence of ‘cliques’, which are defined in network theory as sub-network groupings of fully interconnected nodes. These manifested along both functional lines – with Panama, Liberia, and Cyprus as shipping hubs – as well as geographical lines – with the ‘Bermuda Triangle’ of Bermuda, Cayman Islands, and BVI functionally interdependent. It is likely that tax havens will continue to be a key focus of scholarship. Financial geography can provide a useful lens in this regard and future studies should continue to focus on tax haven network relations.

A decade on from the financial crisis, and despite some initial murmurings about the chance to develop a more human financial system, it seems we’re back to pretty much business as usual. The problem then, is that in the wake of that financial crisis, subsequent recession, and round after round of austerity measures, the worst impacts are being felt in already disadvantaged communities – and this often in places still struggling with the fallout from several recessions back! The dangerous irony is that low-income and minority neighbourhoods experiencing hardship have been increasingly expected to fend for themselves, as a result of the massive costs of bank bailouts, rising unemployment, neoliberal welfare cut-backs and drastic reductions in public spending by central and local governments. Because there’s no magic money tree, right? But if the welfare system takes away with one hand, then perhaps it might give back with the other? Witness the exponential growth of policy (and academic) interest into the financial means by which some communities in the wake of recession are able to withstand such economic hardships, to flourish in the wake of cuts, and ‘harness local resources and expertise to help themselves’ (Cabinet Office 2011: 4). This is the policy appeal of notions of ‘financial resilience’. A bit of a slippery term as we discuss in our paper, and one which for many geographers conjures up the widely tweeted images of resistance pamphlets taped to lampposts at the 2018 New Orleans AAG, expressing local anger at the use of the (neoliberal) resilience label and its apparent suggestion that vulnerable people can cope alone, and policy makers are let off the hook. For their part, economic geographers have also been concerned with the social sustainability and humane redistributive quality of post-crisis growth, and have explored the ‘possibilities of alternative institutions that might help create a richer, more equitable and more diverse, economic and financial ecology’ (French and Leyshon 2010: 2557). Critical assessments of ‘financial resilience’ form a core part of this agenda to re-imagine finance in more socially useful ways. This paper offers some new thinking in these debates, through empirical engagements with a migrant community that does not typically feature in most Economic Geography research, despite close proximity to Canary Wharf and Liverpool Street, as major hotspots of command and control in the global financial system. Our research with East London’s Somali community builds on earlier work by each of us around Islamic finance (Pollard), migrants and their money (Datta), and faith-based economies (James). Our core argument concerns the geographical scope of the search for ‘alternative’, more sustainable models of resilient and redistributive growth in the wake of financial crisis. In short, we are struck by how that search remains a largely Western-centred one, and we are keen to disrupt this through new engagements with a ‘cosmopolitan’ diversity of financial practice. Likewise, by bringing into new productive conversation research by development scholars and economic geographers around economic survival, and diverse economies of giving and mutual aid. On this basis, might it be possible to reclaim the language of resilience as more than just a neoliberal project? These ideas are developed through an empirical analysis of faith-based charitable giving amongst the Somali migrant community in London, for whom Islam forms a major defining element of their identity and is difficult to disentangle from Somali culture. The analysis we develop challenges internalist conceptions of economic resilience (in which the search for sources of resilience is typically focused locally), through appeal to a diversity of translocal resilience practices of financing provision, resource redistribution and livelihood that are simultaneously rooted within and across the global South and global North – this as a function of migrants who move. We also outline a series of future research possibilities that emerge from this work, and which offer exciting synergies with the FINGEO mandate. Faith-based charity and human compassion offer vital (yet heavily under-researched) components of economic resilience, through which monetary and non-monetary assets are mobilised to help people in need.