The subprime crisis of 2007 and the financial crisis subsequent to September 2008 illustrate the extent to which industry is affected by developments in the financial sector and show why the analysis of industrial performance and growth require close attention to the relations between industry, banks and other financial intermediaries. Beyond the highly publicised impact of the financial crisis on such traditional sectors as automobiles and construction, there is now widespread concern that western economies are entering into a period of deflation accompanied by a sharp slowing or even decline in their levels of industrial activity.
These events call for a renewed reflection on the relations between the financial sector and the industry. In particular, the current crisis calls into question the idea of strong institutional complementarities between financial relations and the organisation of industrial activity that has been central in comparative systems approaches to the analysis of national economies, and notably in research on ‘varieties of capitalism’. The current crisis rather points the autonomy of the financial sector and to the way developments within finance can have a destabilising impact on industry. This in turn raises important policy issues and notably the scope for regulating finance and industry-relations in order to promote the forms of financial intermediation that will positively drive industrial competitiveness and growth.
Key issues addressed at the conference include:
Have recent developments in the financial sector including the rise of new forms of financial intermediation and new financial instruments had a differential impact on traditional and more knowledge intensive sectors?
What are the main new forms of corporate governance that have emerged over the last two decades? Is the classic distinction between shareholder and stakeholder capitalism no longer relevant and has the combined processes of globalisation, increasing knowledge intensity and, in the European area, deregulation given rise to new hybrid forms of corporate governance?
From an international the historical standpoint what are the distinctive features of the current financial crisis. To what extent can such notable crises as the Wall Street crash of 1929, the Japanese property bubble of the 1980s, and the US savings and loan crisis of the 1980s and the dot-com bubble in 2000-01 shed light on current developments?
Focusing on market regulation issues, is the usual definition of the distinction between monetary and budget policies still relevant? Is it not necessary to redefine the relation between both these kinds of policy in relation with the macroeconomic context of a substantial economic crisis which is simultaneously affecting big business, small and medium firms, banks and financial markets?
P. C. Hautcoeur (HESS et PSE, Paris)
A. Straus (IDHE, Paris 1)
M. O’Sullivan (Wharton School, University of Pennsylvania)