ABSTRACT
This chapter offers an in-depth analysis of the 2008 financial crisis. First, it explains that for neoliberals the main role of financial markets is not to facilitate investment but to price and therefore value the means of production, in order to guide economic decisions. Secondly, it explains how this view has pushed governments to both expand and deregulate financial markets and to favour the securitisation of financial assets such as mortgage loans, and how this policy laid the ground for the development of the subprime crisis. It argues that the subprime crisis was not only the consequence of a sudden drop in the value of some financial assets but rather of the disappearance of the market’s ability to price and value them. This situation pushed public authorities to intervene by buying up these assets in order to give them a price. The last sections of this chapter investigates the reason why central banks had to implement non-conventional monetary policies as a direct response to financial crisis and, from 2009 onward, to help finance recovery programmes, solve the 2011–2015 Eurozone crisis and support public spending during the COVID-19 pandemic.
