In the industrialized countries financialization, alongside globalisation and neoliberalism, have been central to the developments of capitalist economies over the past three to four decades. These features have, of course, spread throughout the global and of particular interest financial- ization has become a major feature of emerging markets. Particularly in the aftermath of the financial crises of 2007/08, there have been major questions of what have been the effects of financialisation on the wider economy, society and the polity.
This chapter begins with a discussion of what is to be understood by the term financialization. This is followed (Sect. 2.3) by a review of the literature, concerned with the question of the effects of financial- ization and of the size of the financial sector on economic and social performance. As the conclusion drawn is that financialization in the forms which it has taken has been on the whole detrimental for economic performance, Sect. 2.4 considers some policy possibilities for de- financialization. In the concluding section some remarks are offered on the political power of the financial sector and its ability to block political change.