National banking institutions should have economic development as their primary goal

Financialisation vs. Development Finance: the Case of the Post-Crisis Argentine Banking System

“It is clear from our analysis that Argentina’s financialised banking system is not well suited to provide the support required to accompany a development process. Banks are clearly doing well, much better than large corporations, and yet they are allocating very limitted financial resources to productive investment and economic development. Instead, following behaviour patterns of the large international banks, they prioritize short-term profits through consumer credit and other financial activities not directly related to productive investment (42).

Argentina is therefore at a crucial juncture regarding its future. If the country is to truly change economic direction and begin to reverse the effects of 35 years of neoliberal deindustrialisation and reprimarisation, then there is a convincing case to be made that the country would greatly benefit from the nationalisation of its banking system. In addition to the arguments in favour of nationalisation presented in previous sections, historical evidence in this regard is overwhelming. The examples provided by European and Japanese industrialization and the more recent example of successful Asian late-industrialisers are sure witnesses to the importance of State intervention in the banking system to ensure the proper supply of credit for development. In addition to seriously considering historical examples, it is fundamental to learn from from their extensive and well documented experience to avoid making the same mistakes” (43).

This time I am not going to add or criticize anything within this piece.  I am relieved to have found an Argentine source that promotes these ideas.


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