“In the United Kingdom, two financial worlds do not defend the same political interests”

Ln September 24, as she left 10 Downing Street, a reporter asked Liz Truss, silent and dressed in black: “Have the markets rejected ‘Trussonomics’? »

Four weeks later, the downgrading of the United Kingdom’s outlook rating by rating agencies Standard & Poor’s and Fitch, calls to order from the Bank of England, pension funds and the International Monetary Fund (IMF ) – who judged British politics “incredibly inconsistent” – appear to have forced Liz Truss to resign. Has finance got the better of the British Prime Minister?

Still, “finance” would have to exist, which is not the case. Since the 1990s, there has not been one, but two finances in the UK.

No direct access to savings

The first, “mainstream” finance, emerged in the 1970s. It flourished thanks to European integration and the financial “big bang” of Margaret Thatcher, and consisted of “financialising” large industrial companies and the pension system. It brings together players linked to the stock and bond markets, in particular banks, insurance companies and investment banks.

Read the column: Article reserved for our subscribers “Behind the financial crisis in the United Kingdom, the shadow of a Brexit that did not keep its promises”

Dominant in British finance until the mid-2000s, this mainstream finance has since been challenged by the actors of a second movement of financialisation.

The players in this alternative finance accumulate capital within sectors of economic life that have so far escaped financialisation, for example small and medium-sized enterprises, through the development of private equity funds, real estate, via real estate funds, and more recently certain social and environmental activities, thanks to the development of impact investment funds.

Unlike the first finance, the actors of this second finance do not have direct access to savings: they manage assets from elsewhere, collect funds from other professional investors, and are responsible for investing them.

Uncapping banker bonuses

These two finances do not have the same political interests. They accumulate capital differently and support competing political projects within the British Conservative Party and more broadly in Europe.

At the opening of Boris Johnson’s succession in July, mainstream finance players broadly backed Rishi Sunak’s neoliberal agenda against Liz Truss. While Liz Truss proposed removing the cap on bankers’ bonuses, William Wright, the founder of the neoliberal think tank New Financial, believed that the proposal drawn up by Rishi Sunak when he was Boris Johnson’s finance minister was sufficient, because “any move by the UK to remove the bonus cap would directly or indirectly be met with a response from the European Union”.

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