Negotiating the Future of Banking: To Reduce or Not Bank Dependence?
The paper shows that key explanatory factors, such as the availability and the cost of bank credit, the pre- or absence of a credit crunch as well as the structure of the corporate sector, cannot account for the emergence of these divergent policy agendas. Instead, I argue that the divergent policy responses, which emerged in France and Germany post-crisis, have to be seen as the outcome of processes of collective preference formation under conditions of increased situational uncertainty due to interpretational ambiguity. Major events, such as a financial crisis, can lead to the questioning of taken for granted assumptions related to the functioning of the economy which, in turn, leads to the emergence of competing interpretations of what the situation is about and how to deal with it. If this is the case, central actors of the political economy need to come together to reduce interpretational ambiguity through a process of collective preference formation. The paper contributes to the study of institutional change in financial sectors by offering a non-deterministic process-model of how institutional change can come about.