David Bassens and Michiel Van Meeteren
This chapter provides an overview of the main drivers of financial globalization, a process characterized by the growing range and depth of financial relations enshrined in a global financial system that supersedes the international state system. What is it about finance that allows its globalization to take place so rapidly and so deeply? We argue that a main answer lies in the inherent capacity of finance to overcome space and time constraints. Finance appears to produce space, yet, co-constitutively, geographic-institutional variegation feeds back into how finance operates in the world. Resultantly, variegated geographies of finance co-evolve to an important extent with pre-existing geographies of knowledge, law, and power. The chapter offers an overview of how financial geographers have studied financial globalization, and the variegation it produces, through the lens of international financial centres, firms, flows, and products. We illustrate these perspectives through the case of post-war European financial integration by narrating how European states have sought ways to benefit from financial globalization. This application of the analytical apparatus to European financial space reveals how financial globalization has been fundamental in deepening uneven development on the continent. The chapter concludes with an urgent plea to give space a central place in future studies of finance.
Michiel van Meeteren and David Bassens
This chapter examines the effects of advanced producer services on ABN AMRO’s corporate strategy leading up to the bank’s failure in 2007. Our historical reconstruction reveals how consultancy-inspired narratives about globalization, consolidation and shareholder value structured the bank’s geographies of risk and opportunity. Located in Amsterdam, a second-tier global city, ABN AMRO acted upon interpretations of a worldwide merger and acquisition craze that was framed as ‘the global endgame’. This narrative legitimized shareholder-value-inspired reorganizations and valuation metrics that contributed to the bank’s eventual demise. The chapter shows how multinational corporations, facing shareholder pressure, utilize strategic management consultancy narratives to legitimize their decisions to stakeholders. Yet, the bank’s eventual failure also illustrates the limits to the agency of global city makers such as bankers and consultants as this agency is constrained by credibility in financial markets and wider positionality in a system of financial centres.