Sociedade, Tecnologia e Inovação Empresarial - Presidente da ...

Institutional changes in finance and intermediation services:from deregulation to the assesment of new prioritiesThe deregulation of large network services has been a major developmentof the late 80’s and 90’s. It started with the financial sectorwith obvious important consequences for the global functioning of thedeveloped and more recently industrialising countries and the economiesin transition. Financial sectors were highly and diversely regulated sincethe 30s and 40s. In the 70’s, while international transactions had entereda new post Bretton-Woods era, the national restrictions were riskingto become either effectively bypassed or blocking the internationaldynamics of products markets. Deregulation was slow and partialdepending on the initial situation in the various countries. Progressively,and under very different forms among countries, financial capitalacquired a new mobility and creativity. It transformed the governancein all activities, giving on one side more importance to short run transparencyand profitability and on the other side helping to finance riskybut highly profitable longer term projects.By and large European countries followed in a very diverse fashionthe deregulation path taken by the US and the UK 5 . They were in verydifferent positions to do so depending on the characteristics of theirown financial systems. Crucial in that respect were the different nationalways under which firms and households financed their projects. Forfirms it were the different ways they financed their investments in thefirst place but also their merger and acquisition attempts or their temporaryneeds for liquidity. For households it referred to how theyfinanced their consumption and investment (of which housing was inmost countries the most important component) but also how theysaved income for the future, an issue which makes a big difference forthe operation and financial sustainability of welfare states — whethercapital is being accumulated as in the case of pension funds or whetherthose currently at work pay the pensions and welfare contributions ofthose not at work. In both cases external changes like structural changesin financial markets or in demographic structure strongly challenge theviability of the systems.Luc Soete2 9 7Europe and national technology policies…