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Challenging Reflections on ‘Productive’ Banking and Financial Imperialism

Book review of: Christophers B. 2013. Banking across Boundaries: Placing Finance in Capitalism. Malden, Wiley-Blackwell.
Sabine Dörry
Bibliographical reference

Christophers B. 2013. Banking across Boundaries: Placing Finance in Capitalism. Malden, Wiley-Blackwell.

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1Doctrines have their particular importance relative to the time in which they circulate. In contemporary political economy the majority of economists has turned to small, single problems, thus, seeking solutions increasingly by over-relying on abstract economic models instead of formulating big theoretical syntheses for a better understanding of the workings of the global economy. Brett Christopher’s new book counters this development with a political economy of global banking. Although he does not explicitly engage with the recent financial meltdown, he offers a novel historical perspective to understand how economic ideas about the ‘productiveness of banking’ transformed the perception of the banking industry itself and, concomitantly, informed political actions towards an economic imperialism by the Western (banking) world. The latest financial crisis has illustrated that political economy must lend a voice to historical and inter-disciplinary experiences; Banking across Boundaries: Placing Finance in Capitalism is a respective acknowledgement.

2Brett Christophers takes us on an exciting, detailed historical ride through the political economy of banking and examines with great care the mutual relationship between economic ideas and the actual expansion of banking. Overall, he argues that the neoclassic re-conceptualisation of banks as being productive was a first ‘border crossing’ in the realm of economic idea, which enabled a second – geographical – ‘boundary crossing’, i.e., the ‘colonisation’ of international markets by (Western) banks. Yet, the “process of financial internationalization has itself intensified that very perception of productiveness” (p. 2). These two inter-related core questions frame the analytical outline of the book. In a highly original manner, Christophers scrutinises the accounting technique of FISIM (Financial intermediation services indirectly measured) as a performative technology, thus, anticipating what warning voices on FISIM’s potential future impact had assessed before its introduction: “Imagine what might happen … if trade in banking services became a major item in some countries’ balance of payments. […] international competition among national bank regulators, each trying to make banks in his own country more competitive [e.g. through] lax regulation, low reserve requirements, and relaxed attitudes towards capital adequacy” (Neu 1988, cited in Christophers, p. 277). Christophers’ tour de force stimulates novel ways of thinking and understanding and may further serve as a timely reminder to re-engage critically with what is commonly believed to be today’s status quo in banking and finance.

3The book's argument is developed within three major parts, an introduction and an afterword. Each part of the book consists of two chapters. The somewhat complex introduction frames the book’s two core questions with a discussion about the dialectic, mutually constitutive nature of economic ideas and economic ‘reality’, and links them coherently with the remainder of the book.

4Part I – ‘Worlds Apart: Before Keynes’ – takes us to the foundations of modern political economy. Historically well informed, the first chapter scrutinises the discontinuities between the arguments of both the classical and neoclassical political economists, which, embedded in their respective time, entail the disparate understanding of whether banks’ intermediary activities are economically ‘productive’ regarding a nation’s wealth. The chapter takes us on a journey from the labour theory of value and its distinction between unproductive/productive labour (referring to classic political economists like Malthus, Smith, Ricardo and Marx) to the neo-classicist’s emerging concept of utility and its distinct output-oriented understanding of value, i.e. market price. In so doing, Christophers focusses explicitly on “the sources and effects of representations of direct productiveness” (p. 13), which entailed a major challenge for national accountants: If banking possesses indeed a certain degree of productiveness (not to be confused with productivity, p. 13), how then should it be economically calculated and visualised? Whilst chapter 1 focusses on the conceptual foundations of the un-/productiveness dichotomy, chapter 2 engages with the emerging geographical features of banking and illustrates in great depth how the geographies of banking have developed from merchant capitalism to the industrial age. It conceptualises the aspects trade, war, colonial settlements, industrialisation and urbanisation dynamics as well as sets of state policies as important shapers of the ‘globalisation’ of banking, until the impacts of the Great Depression staggered to financial protectionism in the 1930s.

5Part II – ‘Worlds Aligned: From the Great Depression to the Eve of the Big Bang’ – sets out to explore the subsequent developments until the mid-1970s. The book’s third chapter investigates the influence of economic ideas shaped by and being shaped through central pre- and post-war events, culminating in capital controls and a practical dormancy of the international banking business until the end of the 1950s. Pivot towards a new architecture of the world’s financial system (Bretton Woods) was the influential power of ideas and new discourses about the productiveness of international capital flows, formulated, among other, by key economists like Keynes and White. Eventually, Christophers introduces us to the ‘banking problem’, i.e., the fundamental challenge derived from the diverging world views of the banking industry and national accountants: If banks’ intermediation services are productive, indeed, how, then, should resulting interest flows be treated in national accounting? This episode in the book is actually among the most striking ones as it depicts the performative power of ideas and convictions as a key turning point in the history of the political economy of banking. Chapter 4 describes with great insight the development of US national accounting itself. The chapter takes us further through the history of the internationalisation processes of US banking and conceptualises the beginnings of what is identified later in the book as the “institutional colonization of foreign markets” (p. 219, Italic in original).

6The book’s final Part III – ‘Co-Constituted Worlds: The Age of Financialization’ – alludes to the former two previous parts. The fifth chapter argues for the ‘battle over ideas’ after 1970, in which services, including financial services, were generally introduced as tradable economic phenomena. Without this powerful discourse, so the book’s prevailing argument, “services could never have made it onto the WTO liberalization agenda” (p. 190). By coining the new term ‘financial services’, the banking industry had laid the authoritative foundations to mark a decisive moment for its own fortune. From this understanding it is hardly surprising that the tough GATS bargaining process brought the expected success for (Western) banks: transcending national boundaries with the official political blessings. Unfortunately, chapter 6 appears to be the weakest of the chapters. Christophers’ fresh, profound, and sometimes criminological-like investigations in the previous chapters raised the expectations towards a strong, convincing and even somewhat unforeseen conclusion. This chapter, however, has a rather repetitive than merely concluding character.

7A kind of a summary and critical assessment offers the book’s afterword. It posits the question of the main beneficiaries from a “more material understanding of banks’ productiveness” (p. 276) and discusses how both (Western) national governments as well as their banking industries have profited since (most notably but not exclusively at the expense of developing countries and emerging markets).

8As always, the book could have included many more subjects and could have made linkages to other conceptual claims, covering, for example, Susan Strange’s state-market power relationships, a more distinct discussion of the new qualities of capital flows resulting from ‘innovations’ in banking and finance, or a more insightful historical account when briefly introducing Luxembourg and Singapore as exceptional financial economies. But these are minor issues. The book reads very well. Carefully chosen prefixed quotations from other scholars are a joy to gulp as they reveal the bottom line of each chapter they introduce. The book’s complex argumentation patterns of central and a number of side developments are held together with constant reminders of the overall argument and the brief summaries at each chapter’s beginnings and endings. That said, several argumentative repetitions could have been spared and, hence, could have reduced the book’s size significantly.

9Banking across Boundaries: Placing Finance in Capitalism contributes to an extrication and re-interpretation of our knowledge on the political economy of banking. It amalgamates positivist with relativist political economy approaches and, hence, offers stimulating food for thought. It is encouraging that geographers shape the interdisciplinary debate on a high analytical level with such fresh perspectives. Although, one does not necessarily need to share Christophers’ obvious sympathy for Marx’s ideology, this innovative book deserves wide circulation and a broad readership. At any rate, it is an urgent call for a critical reflection on ‘value’ creation and other developments in contemporary banking and finance.

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Neu CR. 1988. International trade in banking services, in Baldwin RE, Hamilton CB, Sapir A (eds) Issues in US-EC Trade Relations. Chicago, University of Chicago Press: 245-269.

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Electronic reference

Sabine Dörry, « Challenging Reflections on ‘Productive’ Banking and Financial Imperialism », Articulo - Journal of Urban Research [Online], Book Reviews, 2015, Online since 27 January 2015, connection on 28 March 2017. URL :

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About the author

Sabine Dörry

Sabine Dörry holds a position as a Marie Curie Research Fellow at the School of Geography and the Environment at the University of Oxford. Her current research focuses on the global production of and trade relations in finance as well as on integration processes in European border regions. Email:

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