There is a broad consensus that financialization has brought many disadvantages and few benefits. This raises a simple question: How did it come about? Why did professional observers allow it to happen even though financialization was not a hidden process? Can we identify sources of legitimation for financialization? To limit the scope of our analysis, we focus on the role of banks to answer these questions. We study changing expectations towards banks from a transdisciplinary perspective, using insights from macroeconomics, sociology and political science. We find that the legitimation of financialization has been multi-faceted. However, at many crucial junctures, the perceived but doubtful need to "increase competition" for banks has tipped the scale in favor of the policies underlying it. The disciplining effects of competition though, have not resulted in less cakes and ale for banks. "If deregulation looks like such a bad idea now, why didn't it then?"

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