Finance Matters

Credit rating agencies (CRAs) assess the creditworthiness of debt issuers on financial markets. They are private companies and the ratings they issue are judgements about the prospect of repayment of debt by an issuer in time and in full. A rating is not an investment recommendation, but it is an opinion about the creditworthiness of a financial product or an issuing bank, government, supra- or sub-national institution. In recent years CRAs have gained an authority in bond markets that far surpasses their original design. The financial crisis of 2008 thrust the CRAs into the spotlight as their highly rated financial products turned out to be toxic assets. CRAs were blamed not only for their excessively optimistic ratings, but also for their complicity in creating them. This short book introduces and explores the complex world of the credit rating industry: how it works, how it has evolved, the role it played in the financial crisis, and how it is regulated. Giulia Mennillo shows, as constitutive actors of global financial capitalism, CRAs have a social and political relevance that reaches well beyond finance into areas of transport, infrastructure, education and health and their impact is emblematic of the increasing financialization of our world.

Germany's public savings banks—Sparkassen—are a remarkable and puzzling phenomena. No other advanced industrial country relies as heavily on such small, public financial institutions to fuel its economy and how is it that such small institutions can drive one of the biggest and most successful economies in the world? In theory, their diminutive size should hinder their ability to function in an environment where they compete with the capital and muscle of major international banks. Yet at the height of the financial crisis, when other banks drastically reduced lending, new loans made by Sparkassen increased as they continued to provide liquidity and lend to start-up firms. How have they managed to survive the economic turmoil and global pressures of the last few decades? What has enabled them to stay at the heart of the German economy? In a period of neoliberal “too-big-to-fail” thinking, how have these relics of an ordoliberal past managed to flourish? Mark Cassell answers these and many other questions in his exploration of the unique entity that is Germany's public savings bank system and the lessons it offers to banking systems worldwide.

Before the Great Financial Crisis of 2008–09, significant reductions in official interest rates typically proved sufficient to generate sustainable economic recoveries from downturns. However, with economies and financial markets in freefall during the crisis despite a cut in interest rates to effectively zero, policymakers in some advanced economies launched a major new tool called quantitative easing (QE). This involved central banks purchasing huge amounts of financial assets. This book offers a thorough and perspicacious analysis of QE, which has become a recovery method of last resort. Whilst it was successful in averting another Great Depression and stimulating growth, it remains controversial and continues to promote widespread debate in economics, financial, and political-economy circles. This book is essential reading for anyone wishing to understand central banking in the national economy.

The European Central Bank administers monetary policy for the eurozone and is tasked with maintaining price stability by keeping inflation below 2 per cent. This brief mandate belies the complexity of managing the monetary policy for the 19 member states of the euro, not to mention the political implications thereof. This book sets out the history, development and day-to-day workings of this key institutional pillar of the European Union. It assesses its work, independence, the policies and instruments at its disposal and the evolution of its role during, and after, the eurozone crisis of 2010. Incomplete monetary union, Germany's hegemonic ambitions and different economic policies from individual member countries are shown to pose formidable challenges to the ECB's macroeconomic management.

This clear and rigorous examination of the international efforts to combat the financing of terrorism is suitable for a range of courses in international relations, politics and global political economy. It provides a comprehensive examination of the post-9/11 efforts to counter financial support for terrorist actors, including the more recent challenges of non-cash payment technologies as well as how to combat the financing of terrorism in regimes where territories and populations are controlled, as in the case of Islamic State.