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Sovereign Debt Management and the Transformation from Keynesian to Neoliberal Monetary Governance in Britain

Dutta, Sahil Jai. 2019. Sovereign Debt Management and the Transformation from Keynesian to Neoliberal Monetary Governance in Britain. New Political Economy, ISSN 1356-3467 [Article] (In Press)

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Abstract or Description

Private financial markets are central to the implementation of monetary governance. This necessary integration of public and private finance means the way states govern must evolve with developments in financial markets. This article examines how the rise of liability management underpinned a shift to market-based banking and transformed the operation of monetary policy in Britain. It assesses the period of reform between 1967 and 1981 and what this meant for monetary governance. Political economy literature depicts this period as a shift to depoliticised, deregulated governance with public authority giving way to market power. This paper challenges this perspective on the grounds that it misconstrues the problem policymakers faced. The shift from Keynesian to neoliberal monetary governance came in response to the change in banking practice with the rise of liability management and a parallel money market. This underpinned an explosion of credit creation that the old system of monetary policy, organised around the Base Rate and ‘primary’ discount market could not fix. As a result, the monetary authorities had to render this new financial environment governable. The period should therefore be reassessed in terms of the capacities the state attempted to construct to conduct monetary governance.

Item Type:

Article

Identification Number (DOI):

https://doi.org/10.1080/13563467.2019.1680961

Keywords:

Liability management, sovereign debt management, monetary governance, monetary policy

Departments, Centres and Research Units:

Politics
Politics > Political Economy Research Centre

Dates:

DateEvent
7 October 2019Accepted
6 November 2019Published Online

Item ID:

27502

Date Deposited:

08 Nov 2019 11:15

Last Modified:

09 Nov 2019 14:01

Peer Reviewed:

Yes, this version has been peer-reviewed.

URI:

http://research.gold.ac.uk/id/eprint/27502

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