The state and credit policies: From the 19th century till present

Instead of presenting one aspect of government intervention and assessing its effects on economic growth or financial stability, new interdisciplinary research studies credit policy as a whole. It examines the multiple dimensions of state intervention in financial markets (to guide the development and allocation of credit) and assesses the institutional complementarities between them. Although mostly focused on the most interventionist period (1930s-1970s), this literature allows for a reinterpretation of previous studies of financial history that have long emphasised the role of the state in the financial sector since at least the 19th century. Beyond the dichotomy between bank-based and market-based financial systems, it highlights the importance of debt guarantees, subsidies, the role of development banks or specialised credit and savings institutions as well as central banks and their liquidity. Providing insurance to limit the risk of investments and savings is not specific to a neoliberal vision of the state aimed at helping markets to function properly. It has also characterised classical liberalism (19th century) and periods of greater state intervention (1930s-1970s). The financial instruments are not new, but the nature of public-private partnerships is. Current credit policies subsidize investment and saving but involve little control on the final use of funds nor constraints on the organization and income of subsidized companies.. Furthermore, current state strategies to attract funds target institutional investors rather than individual savers, and adopt the financial and governance criteria of the former. Much more research is needed to confirm or refute these preliminary hypotheses. Last, I argue two other issues that should receive more attention in analytical studies of credit policy: the ideology associated with different regimes of credit regulation and the link between credit policy and international political economy.