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LEO PANITCH AND MARTIJN KONINGS
MYTHS OF NEOLIBERAL DEREGULATION
If a single root cause has predominated in explanations of the current global financial crisis, it is ‘deregulation’. [*] Lack of state oversight of financial markets is widely cited—not only in the opinion columns of the financial press, but by left-wing commentators, too—as having permitted the perilous over-leveraging of financial institutions, based on weakly securitized debt, that has brought about the present debacle. This diagnosis of the cause of the crisis also steers towards a particular solution: if deregulation allowed markets to get out of control, then we must look to re-regulation as the way out. Thus Will Hutton sees the subprime crisis as the result of decades of laissez-faire policies, resulting in excessive financial growth and instability; now that ‘Anglo-Saxon financial capitalism has suffered a fundamental reverse’, he looks forward to the return of Keynesian regulatory policies. Eric Helleiner also hopes that ‘the crisis may be pushing us toward a more decentralized and re-regulated global financial order . . . more compatible with diverse forms of capitalism’ that would ‘sit less comfortably with an entirely liberal set of rules for the movement of capital and financial services’. By contrast, Robin Blackburn’s analysis of the crisis makes the point that ‘financialization was born in a quite heavily regulated world’, and he questions whether ‘more and better regulation’, even while needed, will ‘be enough’. But his account of the crisis mainly emphasizes rampant financial innovation in an unregulated shadow banking system. 
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