The Illusion of Definancialization.

Summary In this world currently under reconstruction, nothing seems more utopian — or more improbable — than the control or restriction of financial activity. It was the dream of the post-crisis years, the idea that political will could be imposed on all of the movers and shakers of the world of finance. The scenario was soon demolished by the weakness of the U.S. government that was incapable of finding any autonomy in relation to Wall Street. Today, the manifestations of the financial industry are without a doubt more complex and more extensive than they have ever been. For this simple reason, through globalization, finance has the ability to intervene, create and use available liquidity to an unprecedented extent. Yet our whole recent economic history has assigned a key role to the creation of liquid assets at a world, regional and national level as well as via the central banks. In fact, the present authors consider that liquidity is the key to the way in which finance has developed, thus showing the extent to which it would be impossible to imagine a world that was definancialized. Remember that the origin of the evil is to be found in the major imbalance in trades which is itself the product of massive transfers of business from the North to the emerging nations. Even if there is an intention to reduce the trade deficits created by the United States, the reality of deindustrialization of the OECD countries will have two consequences in practice.