ABSTRACT
A relatively rare disjunctive paradigm shift in the economic and regulatory policy spheres emerged from the disruptive global economic and financial crisis of 2007–2008. That ideational and policy shift continues today, supported by a reformed global financial regulatory architecture. Ideas matter in the political and economic calculus of policy making. The political economy sees long periods of continuity followed by a sudden break, as an old worldview is rejected and a new worldview or consensus narrative takes its place. In 2008–2009 political leaders and central bankers, confronted by unexplainable anomalies, made a jump from one consensus narrative to another – from a laissez-faire neoliberal deregulatory mind-set and an excessive reliance on market authority, to a reassertion of state authority via internationally coordinated institutionally buttressed re-regulation of global financial markets and firms. In 2020 in response to COVID-19 and climate change risks, the dominant narrative of leaders, and especially central bankers, continues to extend and broaden the role of state authority over markets.
