Financialisation, central banks and ‘new’ state capitalism: The case of the US Federal Reserve, the European Central Bank and the Bank of England

Abstract

Monetary policies are not usually considered as part of the repertoire of ‘state capitalism’. However, unconventional monetary operations performed by central banks in recent years make this exclusion increasingly problematic. This paper thus explores whether recent central bank interventions should be considered manifestations of ‘new’ state capitalism. Analysis focuses on the actions of three central banks from the advanced capitalist core in the West – the US Federal Reserve, the European Central Bank and the Bank of England. By mobilising the ‘financial chains’ perspective, this paper highlights the fact that, under financialisation, contemporary central banks have assumed a pivotal role in shaping Western capitalism and its uneven geographies. Through these recent unconventional interventions, central banks have in effect become ‘creators’ or ‘generators’ of (financial) capital. As such, their role in shaping uneven economic geographies across space (well beyond their official territorial boundaries) has expanded. Spatial ramifications of central banks’ capital-generating operations could thus fit easily within the framework of ‘uneven and combined state capitalism’. The possibility of considering the unconventional operations of central banks as state capitalist could also go hand in hand with a modified definition of state capitalism. Indeed, the rubric of state capitalism could potentially be enlarged to include configurations of capitalism where the state plays a particularly strong role not only as promoter, supervisor and owner of capital but also as a ‘generator’ of capital. This capital-generating role appears to be essential for the survival of contemporary capitalism.