Money and Banks in the American Political System

Lavelle argues that the political sources of instability in finance derive from the intersection of market innovation and regulatory arbitrage.

Kathryn C. Lavelle (Author)

9781107609167, Cambridge University Press

Paperback / softback, published 14 January 2013

324 pages, 8 b/w illus. 6 tables
22.8 x 15.2 x 1.7 cm, 0.42 kg

'The financial crisis that began in 2008 remains the subject of heated arguments regarding its causes … This new book, grounded in relevant historical developments and guided by a helpful understanding of bureaucratic politics and the distinctive nature of US governments and guided by a helpful understanding of bureaucratic politics and the distinctive nature of US government, brings a refreshingly balanced perspective to the problem. … it sheds light on the most basic causes of US financial instability. Summing up: recommended. Upper-division undergraduate, graduate, research, and professional collections.' M. E. Ethridge, Choice

In Money and Banks in the American Political System, debates over financial politics are woven into the political fabric of the state and contemporary conceptions of the American dream. The author argues that the political sources of instability in finance derive from the nexus between market innovation and regulatory arbitrage. This book explores monetary, fiscal and regulatory policies within a political culture characterized by the separation of business and state, and mistrust of the concentration of power in any one political or economic institution. The bureaucratic arrangements among the branches of government, the Federal Reserve, executive agencies, and government sponsored enterprises incentivize agencies to compete for budgets, resources, governing authority and personnel.

1. The institutional foundations of financial politics in the United States
Part I. A Historical Background: 2. Developing state capacity for the conduct of American finance
3. Creating increasingly complex financial products
Part II. The Bureaucratic Politics and Finance: 4. Making financial policy in Congress
5. Making financial policy in the executive branch and the federal bureaucracy
6. Making financial policy in the federal reserve system
Part III. The Operation of the Financial Political Economy: 7. The process in motion: political institutions, money, and the business cycle
8. The process approaches collapse: politics in the financial crisis of 2008
9. The process in its international context: political in international institutions
Part IV. Conclusions: 10. Governing the US financial system.

Subject Areas: Economic history [KCZ], Political economy [KCP], Politics & government [JP]