Definancialization, Financial Repression and Policy Continuity in East-Central Europe

Cornel Ban*, Dorothee Bohle

*Corresponding author af dette arbejde

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The Great Financial Crisis ushered unorthodox financial policies that would have been unfathomable before 2008. Perhaps unexpectedly, some of the boldest measures on this unorthodox spectrum were adopted in semi-peripheral and therefore theoretically vulnerable countries such as some of the European Union’s new member states from East-Central Europe. Why did policy makers in some of these countries (Hungary, Romania) embarked on rolling back financialization and resort to financial repression in ways that targeted foreign banks in contexts in which this seemed a very risky strategy? Why did such bold moves generally re-established state-finance relations in some countries (Hungary) while comparably milder ones left them generally unaltered in others (Romania)? Finally, why have some countries refrained altogether from such forms of financial unorthodoxy (Latvia)? The paper explains the varieties of policy responses in these countries, with three factors: the role of finance in the national growth model, the capacity of the state to protect itself against adverse bond market reactions and international constraints and opportunities.
TidsskriftReview of International Political Economy
Udgave nummer4
Sider (fra-til)874-897
Antal sider24
StatusUdgivet - aug. 2021

Bibliografisk note

Published online: 18 Aug 2020.


  • Central banking
  • Business state power
  • Financial nationalism
  • Definancialization
  • Obsolescing bargains
  • Financial repression
  • Hungary
  • Romania
  • Latvia