‘Financial chains’ concept: GEOFIN project pilots a novel approach based on the concept of ‘financial chains’ (Sokol, 2017). Financial chains, prime examples of which are credit-debt relationships, are understood both as channels of value transfer (between people and places) and as social relations that shape socio-economic processes and attendant economic geographies. The ‘financial chain’ metaphor therefore has a double meaning: it connotes both the way in which actors are interconnected with financial linkages (which transfer values over space and time) and the way they are ‘chained’ to each other in a social relation, shaping each other’s actions in the processes (Sokol, 2017). However, the examination of ‘financial chains’ (and how they contribute to financial exploitation) represents a methodological challenge because it implies a mobilisation of both quantitative measures such as financial flows (data on which are often missing) and social relations (which cannot be easily quantified). Standard quantitative approaches cannot work here. The existing data on household debt, for example, are often aggregated at the national level and even central banks and regulators have difficulties in knowing what is happening at the regional level. Besides, the figures describe the volumes of lending advanced to households, while the ‘financial chain’ logic suggests that the focus should be on money flowing in the opposite direction – i.e. value extracted from households over time and across space and beyond national boundaries. What is needed, therefore, is hands-on research that will try to capture the mechanisms of how ‘financial chains’ function in space and time. GEOFIN attempts to explore ‘financial chains’ through three main themes, namely: financialisation of states, financialisation of banks and financialisation of households.

Reference:

Sokol, M. (2017) Financialisation, financial chains and uneven geographical development in Europe: Towards a research agenda. Research in International Business and Finance. Volume 39, Part B, January 2017, Pages 678-685. https://doi.org/10.1016/j.ribaf.2015.11.007

Note:

See also our Infographics section for graphical illustrations of the ‘financial chain’ concept.