Financial Globalization, Social Exclusion and Financial Crisis

Abstract

This paper suggests one set of mechanisms that ties financial globalization processes to local dynamics of financial inclusion or exclusion. Specifically, this paper explores the worldwide reconsideration of financial firms' strategies that has accompanied financial globalization. It is shown that the neoliberal and asymmetric-information approaches to credit markets and financial crises in developing economies overlook these dimensions of financial globalization because of their tendency to focus on representative credit markets. Banks' strategic shift has led to the global homogenization and stratification of financial practices—and this in turn has been a key driver of processes of financial exclusion. Financial exclusion then involves bifurcation within financial markets, so that different markets serve different portions of the household and business population. This analysis suggests a reconstruction of Minsky's microfoundational model of the origins of financial fragility and crisis, which shifts from Minsky's emphasis on a representative borrower-lender relationship to a situation of borrower-lender relationships in bifurcated markets.Financial globalization, financial exclusion, financial fragility, banks, banking strategy,

A Second-Order Factor Gender-Measurement Invariance Analysis of Financial Exclusion in Ilorin, Nigeria

“…They are either viewed as not bankable or creditworthy [8]. Therefore, the banks charge high interests in order to discriminate among; and have enough cover on their transaction with this group of borrowers [9], [10]. The moral hazard problem the lenders face is a reflection of their susceptibility to adverse selection of potential clients.…”

Financializing space, spacing financialization

“…First coined in the mid-1990s by Leyshon and Thrift (1995), the idea has been picked and revived by Dymski (Dymski 2005;Dymski and Li 2003) as a measure of engagement with the financial system, so that the possession of financial citizenship confers on individuals and households the right and ability to participate fully in the economy and to accumulate wealth. This is significant because, as part of the broader process of neoliberalization (Peck and Tickell 2002), the contract between the individual and the state is being remade, with personal responsibility and financial markets becoming the default route for short-term income smoothing and long-term financial security.…”

Financial Depth and Financial Access in Indonesia

“…timorexpress.com/flores-raya/lima-koperasi-dinilailintah-darat; http://www.lensaindonesia.com/2015/06/ 06/rentenir-merajalela-bupati-bogor-malah-tutupmata.html; http://finansial.bisnis.com/read/20150611/ 89/442504/suku-bunga-lkm-10-tahun-ke-depanpraktik-rentenir-berkurang; http://petahmelayu.com/kacau-banyak-lintah-daratberkedok-koperasi.html; http://www.hidayatullah.com/berita/nasional/read/20 15/02/03/38026/ulah-lintah-darat-pinjam-6-juta-bayar-40-juta.html; http://www.kapurnews.com/2015/05/28/ waspada-banyak-lintah-darat-berkedok-koperasi-dimeranti 13 foreign bank is defined as a bank with more than 51% of shares owned by foreign parties. The above argument gains strong support from Dymski (2005) and Hamada (2013). Dymski (2005) found that financial globalization created financial exclusion, which was caused by multinational financial corporate strategies focused on the most profitable credit markets.…”

“…The above argument gains strong support from Dymski (2005) and Hamada (2013). Dymski (2005) found that financial globalization created financial exclusion, which was caused by multinational financial corporate strategies focused on the most profitable credit markets. Hamada (2013) subsequently provided evidence that the foreign owned banks in Indonesia tended to reduce their credit to Small and Medium Enterprises (SMEs).…”