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Begin New Search Topic Financial Markets Political Geography Europe Content Type Research Paper

1. Primary Dealer Systems in the European Union

Author:
Jenny Preunkert
Publication Date:
06-2020
Content Type:
Research Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
States require money to function and therefore every government has to continuously raise new funds. On the financial markets, governments cannot be sure that auctions of their debt will be sufficiently attractive to financial investors, which is why governments usually enter into cooperative agreements with selected banks. The best known and most widespread form of cooperation is the primary dealer system. Primary dealers are banks that agree to participate regularly in government debt auctions and to act as formalized market makers on government debt markets. The article analyzes European primary dealer systems and asks why banks are willing to participate in these systems. I will show that both domestic and foreign banks use their status as primary dealers to build long-term relationships with one or more European governments and to gain an advantage on the global stage. In Bourdieu’s terms, primary dealer banks use their financial capital to accumulate social and symbolic capital.
Topic:
Debt, Economics, International Political Economy, International Trade and Finance, Financial Markets, Banks, and Macroeconomics
Political Geography:
Europe and European Union

2. Economic Discourse and the European Integration of Financial Infrastructures and Financial Markets

Author:
Troels Krarup
Publication Date:
06-2016
Content Type:
Research Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
European integration of financial markets appears to repeatedly encounter specific kinds of problems about the substance and limits of the notion of “the market” undergoing integration, and about the status and role of money, market infrastructures, and government within it. Moreover, these problems and the controversies around them parallel classical discussions in economic theory such as that between conceptions of the market as a frictionless space and as a process of competition. A “competitive conception of the market” is identified as producing these parallel problems and controversies in European market integration and economic theory because it implies a contradictory “integration of fragmentation.” These themes and parallels can be specifically identified in a recent major project to integrate financial market infrastructures: a pan-European settlement platform – “Target2-Securities (T2S)” – to overcome existing fragmentation between the systems that perform the actual delivery of money and securities from financial transactions. Moreover, a close analysis of T2S answers a question that existing sociological and political economy approaches to European integration – focusing primarily on the interests and ideas of powerful players – struggle with: why T2S will become de facto a monopoly for the European Central Bank when early on in the integration process EU institutions emphasized an industry-led integration. Foucault’s notion of “discursive formation” is employed to conceptualize these arguments.
Topic:
Economics, International Political Economy, Finance, Financial Markets, Economic Theory, and Michel Foucault
Political Geography:
Europe