Internationalization of Financial Markets and National Patterns of Private Debt (2015 - 2016)
Prof. Dr. Ulrich Glassmann
This project focuses on the question: What influence does the internationalization of the financial markets have on the indebtedness of private households? In recent years, this debt has increased dramatically in many Western countries, but this is not a uniform trend. We explain the differences in private debt with the fact that the internationalization of financial markets in culturally differentiated economies (varieties of capitalism) stimulates more or less risky lending practices.
The core thesis of the project is that the cultural peculiarities of economies may work like barriers for foreign banks that they try to compensate for by high risk strategies, such as particularly favourable credit conditions for private households. This is to be investigated both quantitatively and qualitatively by means of case studies in Germany, Great Britain, Italy and Sweden. In this way, we want to examine the extent to which the risk behaviour of market actors does not only follow rational considerations of profit maximization, but are also a consequence of the risk behaviour of competitors, which can finally lead to the destabilization of markets.