Financial deepening is linked to bankruptcies, bank failures, and recession.

Evidence

Studies of financial deepening—liberalization, financialization—in both developed and less developed economies have shown that it is linked to new instabilities, including bankruptcies, bank failures, extreme asset volatility, and recession in the real sectors of the economy. — Shoshana Zuboff, The Age of Surveillance Capitalism, 1760

Categorization

• XREF: Connects to Piketty’s Capital in the Twenty-First Century and the broader inequality literature flagged in this same Notes section — the instability counterweight to Wall Street’s claimed role in growth. — connects to: High bank leverage turns small asset declines into instant illiquidity and insolvency. — Mark Blyth, Austerity: The History of a Dangerous…, 84; Financial crises serve capital by enabling restructuring and reclaiming working-class gains — Max Haiven, Cultures of Financialization, 498; Financial bubbles burst when current production cannot repay loans borrowed from the future. — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 825 (+5 more)

Broader Connections

• Financial bubbles burst when current production cannot repay loans borrowed from the future. #expands (0.80) — Yanis Varoufakis, Technofeudalism, 825
• Falling profits trigger a self-reinforcing bankruptcy cascade #expands (0.80) — Yanis Varoufakis, Technofeudalism, 824
• Financial fragility plus stagnant wages produce debt-driven growth regimes prone to crisis #complicates (0.80) — Natascha van der Zwan, Making Sense of Financialization, 34
• Severe financial crises trigger a loss of trust in markets #expands (0.75)
• Packing risky mortgages into opaque derivatives under weak regulation enabled the financial crisis #exemplifies (0.75) — Albert Bandura, Moral Disengagement, 1492
• Each great economic transformation produces its own characteristic type of crisis #exemplifies (0.72) — Yanis Varoufakis, Technofeudalism, 517