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Financialization and Crisis: From Low Interest Rates to a Credit Boom and Over-indebtedness

  • Juan Pablo Mateo ToméEmail author
Chapter

Abstract

Certainly, the crisis in Spain has had a very obvious financial dimension. Scholars from different currents emphasize that banks have been protagonists of the housing boom, the interest rates were very low during the boom, the credit increased exponentially and there has been a problem of private over-indebtedness before the crisis—and of public debt afterward. All of this being true, however, the author carries out a critical analysis of these proposals that explain the crisis from finances. In the chapter, he analyzes the financial dynamics based on profitability and the place that Spain occupies in the Eurozone. According to the theoretical framework, it is not finances that originate the crisis. Reversing causality, the author argues that it is first necessary to ask for the reasons that explain the increase of the debt. And in a complementary way, the functionality of finance during the crisis itself and in the European context is evaluated.

Keywords

Monetary policy Indebtedness Financialization Debt-led growth Interest rates Credit Financial capital 

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Copyright information

© The Author(s) 2019

Authors and Affiliations

  1. 1.University of ValladolidSegoviaSpain

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