The Inexorable Drift of the Financial System

Vivien LEVY-GARBOUA * Professeur affilié à Sciences Po. Contact : vlevyg@yahoo.com.

Gérard MAAREK ** Économiste et consultant. Contact : gerard.mrk1@yahoo.fr.Les auteurs remercient Pierre Lahbabi et Christian Pfister pour leur aide dans l'amélioration du texte. Les erreurs qui subsistent ne leur sont pas imputables, évidemment.

The monetary and financial system of developed countries is in constant move, to accommodate changes in the technological, political and social conditions. After a period of “national welfare capitalism”, post WWII, and the “global liberal capitalism” spreading over the 1980-2010 period, we enter a new era, where systemic crisis follow one another, putting a stop to globalization and multilateralism. The rules and principles that used to prevail are no longer accepted and state supervision is tighter.

We try to characterize the slow move of the financial system: on the monetary side, we put forward seven statements which, in our opinion, will shape monetary policy and the role of central banks in the years to come. This inexorable drift brings the financial system towards a dangerous, old fashioned return of inflation and financial repression.