Geofinance between Political and Financial Geographies
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Geofinance between Political and Financial Geographies

A Focus on the Semi-Periphery of the Global Financial System

Edited by Silvia Grandi, Christian Sellar and Juvaria Jafri

This edited collection explores the boundaries between political and financial geographies, focusing on the linkages between the changing strategies, policies and institutions of the state. It also investigates banks and other financial institutions affected by both state policies and a globalizing financial system, and the financial resources available to firms as well as households. In so doing, the book highlights how an empirical focus on the semi-periphery of the financial system may generate new perspectives on the entanglement between (geo) politics and finance.
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Chapter 3: Shadow banking: a geographical interpretation

Gianfranco Battisti


Shadow banking is a peculiar kind of business organization, or better a set of institutions, products and markets, closely intertwined. Its purpose is to run credit activities partly or mainly outside the regulated banking system. This chapter analyses the subject from a structural point of view, within the wider context of the emerging globalized economy. A comparison with the ‘classic’ banking system is proposed, drawing a parallel with the evolution experienced by other economic sectors. Two main issues are considered: (1) the system was already well known but neither assessed nor regulated; and (2) we are not facing a parallel market, but a set of activities which do not develop under one roof, but are fragmented into a variety of companies. All this stresses the scarce visibility of the sector, hence the name shadow. As for official banking, the relationship is both competitive and cooperative, so that the anomaly is to be credited to the entire credit/finance sector. The influence of this process on the spatial distribution of real-economy activities is also discussed.

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