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Lehman Brothers in the Dutch offshore financial centre: the role of shadow banking in increasing leverage and facilitating debt

Tijdschriftbijdrage - Tijdschriftartikel

Credit intermediation outside the regular banking system, or shadow banking, hasincreased immensely over the past decade. This paper situates this increase againstthe backdrop of the structural problem of overaccumulation, and thus the absenceof profitable reinvestment opportunities in the production sphere, in addition tothe scarcity of high-quality collaterals. Zooming in on Europe’s offshore worldand Dutch conduit structures in particular, the paper illustrates, on the basis ofthe Amsterdam-based Lehman Brothers subsidiary (and others), how shadowbanking enables regular banks to increase leverage and take on excessive debt.It will be argued that the continued expansion of debt at the systemic level,inter alia facilitated by shadow banking, heralds the prospect of a crisis far moredramatic than the one we are currently witnessing.
Tijdschrift: Economy and Society
ISSN: 0308-5147
Issue: 3
Volume: 45
Pagina's: 407 - 430
Jaar van publicatie:2017
Trefwoorden:Economie, bedrijfswetenschappen en management , Sociale wetenschappen: Algemene, regionale en gemeenschapsstudies