Financialisation and the dysfunctional nature of the financial system

Financialisation has accompanied the expansion of the capitalist economies for well over one and a half centuries. It has, though, taken different forms, proceeded at different speeds and had different geographical spreads. The paper elaborates on the nature of financialisation and the spread and growth of the financial sector in the past four decades in what is termed financialisation in the present era. The focus here is on developments in Western industrialised economies although noting that financialisation in the present era has been global. There is a review of the relationships between the expansion of the financial sector and economic growth with the general thrust that such expansion has been associated with a slowing of growth. This leads into a more general consideration of whether the financial sector has become a dysfunctional burden for the capitalist economy.