Good and bad banking on Europe’s periphery: pathways to catching up and falling behind

Abstract

The research question here is two-fold. The article seeks to explain why bank performance varied so dramatically during and after the financial crisis on Europe’s periphery, both across states and also at times within them. The dependent variable used is bank performance in terms of credit provision and banks’ contribution to financial stability. The independent variable used is the particular mix at play between political/social purpose (the various forms of which are detailed below) and what is called ‘market authority’, which refers to the importance of market incentives, signals and pricing within a particular financial ‘ecosystem’. The second, related research question is why bank behaviour contributes to economic catching up and adjustment in some countries, but sets back others.

Keywords:

• Comparative political economy
• European politics
• banking

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Although in some parts of the world political competition could conceivably be structured around rival cronyisms, political competition in EU member states typically includes one or more grouping committed to EU norms of civil service depoliticisation.

Additional information

Notes on contributors

Rachel Epstein

Rachel Epstein is Professor of International Political Economy and European Politics at the Josef Korbel School of International Studies, University of Denver. Her publications include Banking on Markets: The Transformation of Bank‒State Ties in Europe and Beyond (Oxford University Press, 2017); ‘Assets or Liabilities? Banks and the Politics of Foreign Ownership versus National Control’, editor, Special Issue of Review of international Political Economy, 21(4), 2014; and In Pursuit of Liberalism: International Institutions in Postcommunist Europe (Johns Hopkins University Press, 2008). [[email protected]]

Martin J. Rhodes

Martin J. Rhodes is Professor of Comparative Political Economy at the Josef Korbel School of International Studies, University of Denver. His publications include Social Pacts in Europe: Emergence, Evolution and Institutionalization (Oxford University Press, 2011), with Sabina Avdagic and Jelle Visser; and The Political and Economic Dynamics of the Eurozone Crisis (Oxford University Press, 2016), with Jim Caporaso. [[email protected]]