Pension funds and financialisation in the European Union.

Bonizzi, Bruno and Churchill, Jennifer (2016) Pension funds and financialisation in the European Union.

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Official URL: http://repository.winchester.ac.uk/340/

Abstract

The expansion and innovation of financial markets, commonly known as financialisation, is closely linked to the growth of pension funds. While the conventional narrative is based on the notion of financial development as a positive change, this paper argues that pension funds may induce demand-led pressures on the financial system, generating potential for systemic risk and instability. The rise of pension funds is therefore important for the process of financialisation, as these institutions’ demand for assets continuously sparks growth and innovation in financial markets. In the current context pension funds are attempting to reduce risk by rebalancing their allocations away from equities towards ‘alternatives’, such as hedge funds and private equity. Coupled with the current regulatory trends towards risk-based funding regulation, we argue that pension funds are unlikely to be a stabilising force in financial markets today.

Item Type: Article
Keywords: L100 Economics, L111 Financial economics, L113 Economic policy, L150 Political economics
Members: The University of Winchester
Depositing User: ULCC Admin
Date Deposited: 08 Nov 2016 12:53
Last Modified: 08 Nov 2016 12:53
URI: http://collections.crest.ac.uk/id/eprint/10910

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