Financialization: critical assessment based on Catholic social teaching

Financialization: critical assessment based on Catholic social teaching Purpose – The purpose of this paper is to address financialization in the light of Catholic social teaching (CST) and investigate the issues surrounding corporate governance and the impact that the priority of shareholder value poses for achieving ethical outcomes in routine economic interactions. Design/methodology/approach – The approach ventures beyond an accounting of the enormous costs of the recent global collapse of financial markets in search of an ethical evaluation as to how this all came about. The ethical evaluation proceeds along two tracks: individual action and system of rules. Findings – Six suggestions as to how to reconcile what is known from CST and what is observed in everyday economic affairs have been offered. Research limitations/implications – The paper is limited to reconciling financialization and issues of corporate governance with CST. Practical implications – The practical desirability and the ethical goodness of a financialized system are commented on and the paper contributes to a better understanding of the origins of the financial market collapse. Originality/value – The global collapse of financial markets linked to the introduction of new financial products in which the return is emphasized and the risk glossed over provides a unique opportunity to contribute to the dialogue on what needs to be done to address the broader problem of financialization. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Social Economics Emerald Publishing

Financialization: critical assessment based on Catholic social teaching

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Publisher
Emerald Publishing
Copyright
Copyright © 2010 Emerald Group Publishing Limited. All rights reserved.
ISSN
0306-8293
DOI
10.1108/03068291011006148
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to address financialization in the light of Catholic social teaching (CST) and investigate the issues surrounding corporate governance and the impact that the priority of shareholder value poses for achieving ethical outcomes in routine economic interactions. Design/methodology/approach – The approach ventures beyond an accounting of the enormous costs of the recent global collapse of financial markets in search of an ethical evaluation as to how this all came about. The ethical evaluation proceeds along two tracks: individual action and system of rules. Findings – Six suggestions as to how to reconcile what is known from CST and what is observed in everyday economic affairs have been offered. Research limitations/implications – The paper is limited to reconciling financialization and issues of corporate governance with CST. Practical implications – The practical desirability and the ethical goodness of a financialized system are commented on and the paper contributes to a better understanding of the origins of the financial market collapse. Originality/value – The global collapse of financial markets linked to the introduction of new financial products in which the return is emphasized and the risk glossed over provides a unique opportunity to contribute to the dialogue on what needs to be done to address the broader problem of financialization.

Journal

International Journal of Social EconomicsEmerald Publishing

Published: Jan 1, 2010

Keywords: Financial markets; Religion; Social value; Corporate governance; Corporate social responsibility; Ethics

References

  • Middle level thinking
    Maines, D.; Naughton, M.
  • Financialisation and the slowdown of accumulation
    Stockhammer, E.

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