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From Wikipedia, the free encyclopedia

Financial capitalism is a form of Capitalism where the intermediation of savings to investment becomes a dominant function in the economy, with implications for the political process and social evolution. It is different from the term Finance capitalism, which derives from Marxist analysis.

Contents

The importance of financial intermediaries

In Financial capitalism, financial intermediaries become large concerns, ranging from banks to investment firms, such that deposit banks attract deposits and lend out money while investment banks obtain funds on the interbank market to relend for investment purposes. Investment firms, by comparison, act on behalf of other concerns, by selling their equities or securities to investors, for investment purposes[1].

Social implications

The meaning of the term Financial capitalism however goes beyond the importance of financial intermediation in the modern capitalist economy. It also econompasses the significant influence of the wealth holders on the political process and the aims of economic policy.[2][3]

Views on Financial capitalism

Some writers, like Ravi Batra, consider Financial capitalism the final stage of capitalism, ending in financial instability and depression.

See also

References


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