Financial capitalism
Financial capitalism is a form of capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...

 where the intermediation of savings to investment becomes a dominant function in the economy, with implications for the political process and social evolution. It is different from the term finance capitalism
Finance capitalism
Finance capitalism is a term in Marxian political economics defined as the subordination of processes of production to the accumulation of money profits in a financial system. It is characterized by the pursuit of profit from the purchase and sale of, or investment in, currencies and financial...

, which derives from Marxist analysis
Marxism is an economic and sociopolitical worldview and method of socioeconomic inquiry that centers upon a materialist interpretation of history, a dialectical view of social change, and an analysis and critique of the development of capitalism. Marxism was pioneered in the early to mid 19th...


The importance of financial intermediaries

In financial capitalism, financial intermediaries become large concerns, ranging from banks to investment firms, such that deposit banks attract deposits and lend out money while investment banks obtain funds on the interbank market
Interbank market
The interbank market is the top-level foreign exchange market where banks exchange different currencies. The banks can either deal with one another directly, or through electronic brokering platforms. The Electronic Broking Services and Thomson Reuters Dealing 3000 Xtra are the two competitors in...

 to relend for investment purposes. Investment firms, by comparison, act on behalf of other concerns, by selling their equities or securities to investors, for investment purposes.

Social implications

The meaning of the term financial capitalism goes beyond the importance of financial intermediation in the modern capitalist economy. It also encompasses the significant influence of the wealth holders on the political process and the aims of economic policy. Ravi Batra
Ravi Batra
Raveendra Nath "Ravi" Batra is an Indian-American economist, author, and professor at Southern Methodist University. Batra is the author of six international bestsellers, two of which appeared on The New York Times Best Seller list...

 considers financial capitalism the final stage of capitalism, ending in financial instability, depression and political transformation. Since the financial crisis of the late 2000s
Late-2000s financial crisis
The late-2000s financial crisis is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s...

, such views have become more commonplace.
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