What is Financialisation?

About Financialisation:

• It refers to the increase in size and importance of a country’s financial sector relative to its overall economy. 
• It is a process whereby financial markets, financial institutions and financial elites gain greater influence over economic policy and economic outcomes.
• It represents the shift from traditional industrial or productive activities (like manufacturing) to financial activities that involve the trading, management and speculation of financial assets.
• The term also describes the increasing diversity of transactions and market players as well as their intersection with all parts of the economy and society.
• It has occurred as countries shifted away from industrial capitalism.
• It impacts both the macroeconomy and the microeconomy by changing how financial markets are structured and operated, and by influencing corporate behavior and economic policy.
• Financialisation has also caused incomes to increase more in the financial sector than in other sectors of the economy.