My research addresses three interlinked research areas – the development of China’s capital markets (empirical focus), the role of infrastructures in global finance (conceptual) and the post-crisis transformation of the global financial system (‘big picture’).
China’s capital markets & their integration into global finance
In this first research area, I analyse the post-financial crisis reform and opening process of China’s capital markets between 2009-2018. In 1989, capital markets did not exist in China. Fast forward to 2018, China is home to the 2nd largest equity markets, 2nd largest futures markets and 3rd largest bond markets in the world. And while China’s capital markets were closed to the outside world for decades, they have become connected to both regional and global financial markets ‘at an unprecedented pace’. However, a closer analysis reveals that the capital markets that have developed in China function quite differently from global capital markets. Instead of ‘global’ markets which facilitate the power of private financial actors, Chinese capital markets are intricately linked with state institutions and national development goals. This work is the main empirical focus of my research, contributing to the understudied topic of China’s changing financial system.
In my PhD research, I therefore analyse the role of China’s (stock and derivatives) exchanges who organise Chinese capital markets in a way that facilitates the state’s ability to control capital markets and to direct market outcomes towards certain state policies.
The political economy of financial market infrastructures
In this second research area, I analyse the emergence and governance of financial market infrastructures – the focus here is more conceptual in nature. Where do markets come from? Instead of emerging spontaneously, financial markets require the pre-existence of specific infrastructural arrangements that enable the functioning and shape the workings of these markets. Data, indices, products, trading platforms and rules, clearing and settlement systems – these and others are the necessary conditions for financial markets to work in the first place. And these infrastructures are organised by specific agents: exchanges for instance organise equity markets, index providers make investment decisions for a rising tide of passive investments, clearing houses decide how risk is managed in derivatives markets. But rather than a technical exercise, these infrastructures are highly political with important consequences for the governance of finance and power distribution between states and markets, between various private and public actors.
In this conceptual work, my research focuses on the emergence and transformation of specific actors that govern these infrastructures, notably exchanges, index providers and clearing houses.
Finance after the global financial crisis 2007-2009
In this third research area, I investigate how the first two areas impact upon post-crisis reconfigurations in global finance – how they contribute to the ‘big picture’. Global finance has undergone significant changes since the global financial crisis 2007-2009. Regulation has changed certain areas of finance, banks for instance have borne the brunt of regulatory costs, while others – such as the shadow banking sector – have remained relatively unchanged. New actors have emerged in global finance: proprietary trading firms have become a dominant force with the spread of high-frequency trading, clearinghouses have gained in prominence with regulations such as EMIR or Dodd-Frank, asset managers have become the new universal owners in the new age of passive investments. Further, new actors have emerged, notably from China, India or Brazil – development finance is shaken up by new actors such as the New Development Bank , RMB internationalisation has become an important issue, and the Belt and Road Initiative is bound to reshape global financial and trade flows.
Hereby, my current research focuses on China’s rise in global finance for instance its integration into the global financial order or the financial infrastructures behind the Belt and Road Initiative, and how the rise of exchanges, index providers and clearinghouse in global finance changes power and actor constellations in global finance.