The wide-ranging varieties of capitalism literature rests on a particular conception of banks and banking that, the authors argue, no longer reflects the reality of modern financial systems. They take advantage of the greater information regarding bank activities revealed by the financial crisis to consider the reality, across eight of the world's largest developed economies, of the financial power of banks to act as bulwarks against market forces. This article offers a market-based banking framework that transcends the bank-based/capital market–based dichotomy that dominates comparative political economy's consideration of financial systems and argues that future CPE research should focus on the activities of banks. By demonstrating how market-based banking increases market influences on the supply of credit, the authors highlight an underap-preciated source of financial market pressure on nonfinancial companies (NFCs) that can have a potential impact across the range of issues that the varieties of capitalism (VoC) literature has seen as differentiating national systems. This approach has implications in areas such as labor, welfare, innovation, and flexibility.

Arbitrage is a form of trading crucial both to the modern theory of finance and to market practice, yet it has seldom been the focus of study outside of economics. This article draws upon four initially separate ethnographic and interview-based studies to sketch a ‘material sociology’ of arbitrage. (The article follows financial market usage in viewing ‘arbitrage’ as trading that exploits discrepancies in relative prices, trading which is seldom the entirely riskless arbitrage posited by finance theory.) Prices are physical entities, and the extent and speed of the mobility of these entities are crucial to arbitrage. Traders' bodies sometimes need to be trained to conduct arbitrage, and the relative placement of different bodies can be crucial. Arbitrage generally involves a theory of the similarity of different assets, and material representations of relative value are often required in order to check the theory's plausibility. Arbitrageurs need to convince themselves and others such as investment-bank managers — and sometimes traders working for different organizations — of the correctness of the theory. Among the reasons this is necessary is that an arbitrage position often incurs losses before it becomes profitable, and those who provide arbitrageurs with capital have to be persuaded that those losses are indeed temporary. Patterns of trust and information exchange among known others are thus consequential, and arbitrage also has wider social aspects, manifest for example in deliberately constructed barriers to the short sales often required for arbitrage. Sometimes, too, arbitrage impinges on informal norms of proper conduct in markets.

Michel Callon has conceptualised economic actors as made up of socio‐technical agencements: collectives of human beings, technical devices, algorithms, and so on. This article reports a pilot, partially observational study of a hedge fund, a category of actor in financial markets that is of growing importance but that has so far attracted little attention in economic sociology. It draws on that study, and on interviews with other financial market practitioners, to delineate what is involved in viewing such an actor as made up of an agencement, and discusses the merits of doing so.

This article explores what the financial crisis shows about changes in the German and French banking systems, the two largest in continental Europe. In particular, we highlight processes of financialization -defined here as the increased trading of risk. We focus on an apparent contradiction: why did the supposedly more protectionist and conservative German banking system suffer much higher losses than the more liberalized French system? This article also examines the responses of German and French banks and governments to the crisis and speculates how far these responses might limit future financialization and shape national banking systems.

In comparative political economy (CPE), 'patient capital' ('PC')-primarily from relational banks-as central to distinguishing national economies. The rise of 'market-based banking' highlights the growing inability of commercial banks to be patient. This raises the question of whether alternative forms of PC exist, but CPE lacks a framework to consider PC provision by financial markets. We develop our concept of PC and a framework for determining the investors most likely to provide it-and under which conditions. We define PC as equity or debt whose providers aim to capture benefits specific to long-term investments and who maintain their investment even in the face of adverse short-term conditions for the firm. We argue for determining patience though three questions: 1. Is the investment (loan) intended to be short or long term? 2. Is the investor engaged with management in pursuit of short-term share price performance or creditworthiness? 3. What is the likelihood of exit because of concerns regarding short-term performance? Our framework lays the cornerstones for a new comparative theory of financial systems.

Domestic Commercial Banks Very high involvement. Own 79.4%. High involvement. Own 37.3%. 62 High involvement. Own 43.2%. Domestic Individuals Involved. Probably own 20%. 62 Involved. Own approximately 25%. 62 Not involved. Own 0.16%.

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