Europe's mea culpa : a global economy gone mad or a crisis of our own making?

Much of the existing literature on the current financialized era of capitalism is guilty of essentializing the US experience. The methodological implication of this conceptual starting point has been that financialization in Europe was, and still is, generally assessed in comparative terms against the yardstick of US developments. This limitation obscures from view the unique trajectory of European finance-led innovation, and consequently, the extent to which European economies have become vulnerable to financial instability and crisis. To remedy this, the present article investigates the micro-foundations of European financialization in the lead-up to the 2007–2008 global financial crisis to uncover the reasons for the surprising severity and persistence of financial instability in Europe. The article argues that while the institutions, actors and practices underpinning European financialization may differ markedly from those in the US, the former were nevertheless at once reconstituted by, and constitutive of, the continuous global process of finance-led restructuring. This work offers insights that go beyond the specificities of European financial capitalism. It facilitates a more nuanced approach to banking and macroprudential policy reform in Europe as well as encourages further research into the financialization of accumulation in other national and regional contexts