Special Issue: Elites and Power after Financialization

Theory, Culture & Society

2017, Vol. 34(5–6) 53–75
Shadow Banking ! The Author(s) 2017
Reprints and permissions:

after the Crisis: sagepub.co.uk/journalsPermissions.nav

DOI: 10.1177/0263276417716513

The Dutch Case journals.sagepub.com/home/tcs

Ewald Engelen
University of Amsterdam

Abstract
This paper presents the case of the post-crisis discursive defence of shadow banking
in the Netherlands to argue, first, that there is a need to dust off older elite theories
and adapt them to post-democratic conditions where there are no widely shared
‘political formulas’ to secure mass support for elite projects. Second, that temporality
should be taken more seriously; it is when stories fail that elite storytelling can be
observed in practice. As new ‘political formulas’ are minted and become established,
elites can again hope to withdraw from the political scene and leave policy-making to
the self-evidence of output legitimacy and/or the perpetuum mobile of There-Is-No-
Alternative (TINA). This suggests that elite theory should replace an epochal reading
of post-democracy with a more conjunctural one.

Keywords
elites, financialization, Great Financial Crisis, post-democracy, power, shadow bank-
ing, tax avoidance

[I]n fairly populous societies that have attained a certain level of

civilization, ruling classes do not justify their power exclusively by
de facto possession of it, but try to find a moral and legal basis for
it, representing it as the logical and necessary consequence of doc-
trines and beliefs that are generally recognized and accepted. [. . .]
This legal and moral basis, or principle, is what we have elsewhere
called . . . the ‘political formula’. (Gaetano Mosca, The Ruling Class,
1939 [1933]: 69)

Corresponding author: Ewald Engelen. Email: e.r.engelen@uva.nl

Extra material: http://theoryculturesociety.org/
54 Theory, Culture & Society 34(5–6)

[W]hile elections certainly exist and can change governments, public

electoral debate is a tightly controlled spectacle, managed by rival
teams of professionals expert in the techniques of persuasion, and
considering a small range of issues selected by those teams. The
mass of citizens plays a passive, quiescent, even apathetic part,
responding only to the signals given them. Behind this spectacle
of the electoral game, politics is really shaped in private by inter-
action between elected governments and elites which overwhelm-
ingly represent business interests. (Colin Crouch, Post-Democracy,
2004: 4)

Introduction
When Lehman Brothers filed for bankruptcy, many knew it was going to
be a huge event but few that it would become as big as it did. Nine years
later, the failure of Lehman Brothers still stands as the immediate trigger
of the largest financial crisis since the 1920s, the largest bank failure ever
as well as the largest bankruptcy ever. Less well known is the fate of its
subsidiary, Lehman Brothers Treasury BV, domiciled in Amsterdam,
fully owned by Lehman Brothers Holding UK, regulated by the Irish
central bank and used by London-based Lehman Brothers International
Europe Ltd. as a passive funding interface for the global Lehman group.
Established in 1995, it was one of four such funding vehicles used by
the Manhattan-based banking group to finance its operations by selling
almost 4000 structured financial products – so called ‘linked notes’ ran-
ging in size from $300,000 to $115 million, referencing a wide range of
different financial assets – in return for funding that was immediately
passed through to one of Lehman Brothers’ operational units, generating
legal obligations from these units to Lehman Brothers Treasury BV and
from Lehman Brothers Treasury BV to the institutional investors and
private individuals who bought them. In short, Lehman Brothers
Treasury BV was a typical shadow banking entity: nominally a non-
bank financing vehicle and hence outside the scope of national banking
regulators but in practice tightly coupled to a licensed and thus regulated
bank.
In 2008, the Dutch funding vehicle had become by far the largest.
According to its 2007 annual report, it had $34 billion in notes outstand-
ing, turning Lehman Brothers Treasury BV into the single largest claim-
ant on the Lehman holding after its bankruptcy. Tellingly, managing an
annual cash flow of well over $11 billion, with a balance sheet of
$34 billion, generating taxes of $4 million over profits of $31 million
(12% in a jurisdiction with a nominal corporate tax rate of 25%) did
not require any employees. Two of its managing directors were Dutch
frontmen employed by trust firm Equity Trust that took care of all the
Engelen 55

legal-administrative obligations, while the other three were legal officials

from the Swiss and German subsidiaries of Lehman Brothers.
The Lehman case is typical for the way in which the Dutch offshore
‘infrastructure’ – originally established and developed at the behest of
Dutch multinational corporations to prevent double taxation and subse-
quently ‘discovered’ by non-Dutch multinationals for ‘tax management’
purposes (OECD, 2013; Palan et al., 2009) – has since the mid-1990s
started to ‘double’ as a financial ‘transfer haven’ serving the arbitrage
and funding purposes of global banking groups (see also Fernandez and
Wigger, 2017). This had everything to do with the increasing importance
of short-term interbank funding to finance the day-to-day operations of
large integrated banks in an attempt to increase revenues and profits in a
low-interest-rate environment by building ever larger balance sheets on
ever smaller slices of equity – a development Hardie et al. (2013) have
described as the rise of ‘market-based banking’ (see also Ertürk and
Solari, 2007; Engelen et al., 2011).
As such, off-shore jurisdictions like the Netherlands, Luxembourg and
Ireland have been instrumental for the financialization of global capital-
ism by providing crucial infrastructural services to large financial agents,
in the form of tax avoidance, regulatory arbitrage and the facilitation of
what is called ‘financial innovation’, as is indicated by the widespread use
of securitization techniques to repackage mortgages, student loans, car
loans and credit card debts as well as standardized tax avoiding products
such as the ‘double Irish with a Dutch sandwich’ being globally sold by
the likes of EY, PwC, Deloitte and KPMG to their multinational cus-
tomers. The ‘commercialization of sovereignty’ this implies is no excep-
tion but the condition of possibility of global financialized capitalism
(Urry, 2014; Palan, 2002).
According to the latest available data (2011), there are 66 foreign
banking group-related special purpose vehicles active in the
Netherlands, managing a combined balance sheet of E276 billion
(SEO, 2013: 226). While, for privacy reasons, these data cannot be
traced to specific banks, anecdotal evidence points to many of the largest
global banks. As the UK-based NGO Actionaid has shown, British
banks and insurers collectively own hundreds of shell companies in the
Netherlands. Barclays has eight, HSBC 12, ICAP nine, Legal & General
seven, Lloyds Banking Group 23, Prudential 10, RSA Insurance Group
seven, Schroders five, Standard Chartered 13 and RBS, partly as a result
of the takeover of ABN Amro in 2008, no less than 71 (Actionaid, 2013).
A total of 28,000 billable hours and a record E7.5 million in fees later,
investors had been reimbursed for 7.73 per cent of total claims of
$34 billion, of which 20 to 30 per cent is ultimately expected to be
recouped. The political point of this story is that it unexpectedly uncov-
ered the importance of the Dutch jurisdiction for the ‘shadowy’ world of
global interbank lending. What the failure of Lehman Brothers and the
56 Theory, Culture & Society 34(5–6)

ensuing credit crunch did for the ‘discovery’ of the vulnerability of

‘market-based banking’ to bank-runs through the backdoor of interbank
lending, the revelation of the role of Lehman Brothers Treasury BV did
for the comforting storyline that the credit crunch originated in the US
and had nothing to do with European (shadow) banking (see also
Fligstein and Habinek, 2014; Hardie et al., 2013). For, if that story
were true, how could Lehman, unbeknownst to the Dutch regulator,
have channelled a sizeable part of its funding (7%) and leveraging up
(building a $700 billion balance sheet on a mere $23 billion of equity)
through a single Dutch shell company?
Even more important was what it revealed about the role of the Dutch
jurisdiction in international finance. Potentially embarrassing – and when
caught up in an international backlash extremely inconvenient for the
three largest Dutch banks (Rabobank, ING and ABN Amro) who rely
for the large-scale securitization of their mortgage portfolios on that very
same ‘infrastructure’ – the revelation met a concerted attempt by Dutch
elites to preempt precisely such a backlash. This paper describes in detail
the rhetorical stratagems used by Dutch elites in response to a number of
high-profile reports produced by the Basle-based Financial Stability
Board to protect the Dutch ‘transfer haven’.
The theoretical point of the story is twofold. First, it highlights the
need to dust off earlier elite theories – from Mosca (1933) to Mills (1956)
and Lukes (2005) – to throw light on elite manoeuvring in response to
changing conjunctures. Power has increasingly shifted away from the
demoi of classic democratic theory to the rich, privileged and well-posi-
tioned (Streeck, 2013; Mair, 2013), inviting a return to older conceptu-
alizations of elite power.
These will have to be adapted, though, to our current context, which
has been described as ‘post-democratic’ by Crouch (2004). This is a con-
dition in which the ‘political formulas’ from Mosca’s epigraph adorning
this paper, i.e. the ‘doctrines and beliefs that are generally recognized and
accepted’ and served as ‘the legal and moral basis on which the power of
the elite rests’ (1933: 69), have lost their integrating powers. Instead,
elites increasingly engage in ritualistic modes of politicking, while
behind the scenes thinly-veiled stories of sectoral interests serve as the
cognitive mobilizers of cross-elite coalitions hiding behind a supra-
national technocracy that is fundamentally about ‘democracy dodging’
(Urry, 2014: 14).
While largely accepting this description of our current political situ-
ation, the paper argues for a more conjunctural reading, rather than a
purely epochal one. Post-democracy depends crucially on time and policy
domain. As the Dutch case shows, the Great Financial Crisis delegiti-
mated the story of the benefits of financial market deregulation, putting
elites in the uncomfortable position post-crisis of having to protect finan-
cial practices that were highly beneficial to the few without possessing
Engelen 57

a narrative, or ‘political formula’ in Mosca’s terms, to convince or

silence the many. This provided observers, such as the author of this
paper, with a unique chance to observe the construction of new narra-
tives in action.
The setup is straightforward. The first section presents the case and
discusses in some detail the construction of a counter-narrative by Dutch
elites to protect their ‘transfer haven’ from international damage. The
second section uses recent discussions of ‘discursive power’ to analyse the
rhetorical stratagems used by Dutch elites and the sectoral interests
behind them. The third section draws theoretical conclusions and dis-
cusses their meaning for the current state of elite theory. The paper ends
with a brief discussion of whether this implies conspiracy theory.

Damage Control
The story begins at the Centralbahnplatz 2, in Basel, Switzerland, home
of the Bank of International Settlements, the global banking regulator, as
well as the Financial Stability Board, responsible for global financial
stability (Helleiner, 2010). Even before the failure of Lehman Brothers,
insiders worried about the increasing complexity of the global interbank
market. The first to coin the term ‘shadow banking’ was Paul McCulley
of bond investor Pimco, who used it to refer to the special investment
vehicles, conduits and special-purpose vehicles that banks used to securi-
tize and offload their assets, attract funding and arbitrage around regu-
lation (McCulley, 2007).
After the bankruptcy of Lehman Brothers had demonstrated the vul-
nerability of banks to bank-runs in what quickly became known as the
‘shadow banking system’, the G20 decided in the fall of 2010 that there
was an urgent need to complement new capital standards for banks (also
known as Basle 3) with better overview of the scale, scope and shape of
shadow banking to keep track of its interaction with regular banking
activities. As the communique stated:

With the completion of the new standards for banks, there is a poten-
tial that regulatory gaps may emerge in the shadow banking system.
Therefore, we called on the Financial Stability Board to work in
collaboration with other international standard setting bodies to
develop recommendations to strengthen the regulation and oversight
of the shadow banking system by mid-2011. (G20, 2010)

‘Shadow Banking: Scoping the Issues – a Background Note of the FSB’,

of 12 April 2011, was the first mapping exercise of the Financial Stability
Board. Casting its net wide, the board tried to identify pockets of risks,
which would demand further regulation and hence further investigation.
It mentioned specifically ‘systemic risk concerns’ (maturity mismatches,
58 Theory, Culture & Society 34(5–6)

excessive leverage, ‘hidden’ channels of contagion) and ‘regulatory arbi-

trage concerns’ and announced they would publish a more fine-grained
update of the shadow banking system on an annual basis (FSB, 2011a).
The first such annual monitoring report, ‘Shadow Banking:
Strengthening Oversight and Regulation’, was presented at the G20
Summit of November 2011 (FSB, 2011b). It provided a rough sketch
of the growth of shadow banking over time, its size vis-à-vis regular
banking, insurance and asset management sectors, its composition and
its geographical distribution. The results made quite a splash in the inter-
national business press. Its size – $60 trillion, a little over half of total
banking assets of the G20 and Eurozone banks – compared to one time
global GDP, as did the fact that the value of shadow assets had hardly
budged during the crisis, while banking assets had steeply declined. Its
complexity, protean nature and interconnectedness with the long and
fragile credit intermediation chains controlled by global banking
groups were a further cause for concern. The observation that the
Netherlands was the third largest shadow banking jurisdiction, after
the US and the UK, at the time largely escaped the Dutch press; only
two small reports were dedicated to the topic, with no follow-up.
It had not escaped the attention of the international regulatory com-
munity. The second monitoring report, which was presented at the
November 2012 ministerial G20 meeting in Mexico, gave a much more
detailed overview of shadow banking, breaking down the aggregate fig-
ures for each jurisdiction and providing figures of the assets and liabilities
of shadow banks in those jurisdictions (FSB, 2012). This report was even
more pronounced in showing the eccentric nature of the Netherlands in
global shadow banking.
Together with the US, the Netherlands was the only jurisdiction where
the balance sheets of shadow banks were larger than those of regular
banks. Moreover, compared to an average shadow banking size to GDP
of 111 per cent, the Netherlands (together with Hong Kong, the UK,
Singapore and Switzerland, where it was five times GDP) clearly was an
outlier. Finally, the Netherlands stood out for the peculiar composition
of its shadow banking sector. Approximately 95 per cent of it consisted
of shell companies known as ‘Special Financial Institutes’ (SFIs), which
was an administrative category typical for the Dutch jurisdiction, and
represented almost 5 per cent of the $67 trillion global shadow banking
industry in 2011. It was for these reasons that the board had commis-
sioned a separate case study on the Netherlands, based on micro data
from the Dutch Central Bank (DNB), which was added as an annex.
The Dutch case study was written by two central bank officials and
was explicitly meant to downplay the size and riskiness of Dutch shadow
banking. The authors admitted that there were at least 14,000 shell com-
panies operational in the Netherlands, but noted that most were owned
by multinational corporations and were used for what was
Engelen 59

euphemistically called ‘tax management’ purposes. Moreover, while these

shell companies were formally not regulated by the Dutch Central Bank,
they were subject to ‘consolidated supervision abroad if they are part of
financial groups’, according to the study. Finally, the authors claimed
that the ten largest companies, capturing almost 95 per cent of assets,
reported detailed annual balance sheets as well as monthly transaction
flows to the Dutch Central Bank, albeit on a voluntary basis. Hence, the
conclusion that ‘the majority of SFIs do not fall under the FSB definition
of shadow banking’ (p. 11) and those that do are either supervised by the
central bank (‘securitization vehicles’) or are subject to annual and even
monthly reporting requirements (‘funding vehicles’).
Although the Dutch press by and large missed the report and its
annex, they did take up the longer version that the Dutch Central
Bank published nine days later on its website under the tagline:
‘Shadow banking less substantial than assumed’ (my translation).
Using the same data, its message was similar albeit phrased in more
explicit language: the excessive size of Dutch shadow banking was pri-
marily due to its role as an international tax transfer hub. The report,
which was penned by the same authors that were responsible for the
annex, started with a summary of the literature on shadow banking,
gave a brief overview of the mapping exercise of the Financial Stability
Board (pp. 11–22), then embarked on a more detailed deconstruction of
the aggregate Dutch figures (pp. 23–35) and concluded with an overview
of the policy measures (pp. 36–42), followed by some annexes (pp. 43–9)
(DNB, 2012). It is the detailed deconstruction that is most interesting, for
it is there that the nascent rhetorical strategy to deflect the concerns over
Dutch shadow banking was first developed.
While acknowledging that, according to the broad metrics employed
by the Financial Stability Board, shadow banking in the Netherlands was
large, the report stressed that these metrics were ‘crude’ and should be
taken as gross initial estimates, not as accurate measures of its true size,
let alone of its risks for Dutch (not global!) financial stability. Using a
functionalist definition of shadow banking (do the entities at stake con-
duct bank-like services, i.e. credit intermediation, maturity transform-
ation [borrowing short term, lending long term], risk transformation
[buying high-risk assets, selling low-risk assets], liquidity transformation
[buying illiquid assets, selling liquid assets]?), the authors identified five
types of entities that had shadow bank-like properties, i.e. financial shell
companies, securitization vehicles, financing vehicles, money market
funds and hedge funds.
On the basis of that typology, the authors concluded that only one-
quarter of what was identified by the Financial Stability Board as
shadow banking was actually involved in bank-like activities. With a
total balance sheet of E988 billion, this was still substantial (1.7 times
GDP), but not nearly as alarming as the earlier estimate of E3000 billion
60 Theory, Culture & Society 34(5–6)

(five times GDP). As a result, the Netherlands could be deleted from two
of the alarming lists drawn up by the Financial Stability Board: it was no
longer a jurisdiction where shadow banking was larger than regular
banking (four times GDP), and it was no longer a jurisdiction with an
oversized shadow banking sector to the tune of five to six times GDP,
as were Hong Kong, the UK, Singapore and Switzerland.
In fact, by far the largest category of financial shell companies or
‘special financial institutes’ consisted of holdings and/or financing cor-
porations that were fully owned by foreign multinational corporations,
resulting in the oxymoron of ‘non-financial special financial institutes’
(emphasis added), although the authors were completely oblivious to
the paradoxical nature of that denotation. According to the authors,
these legal entities were mainly established in the Netherlands because
of its extensive network of bilateral tax and investment treaties as well as
its ‘well-developed financial infrastructure’ (p. 29). It was the continuing
growth of these non-financial SFIs that largely accounted for the growth
of Dutch shadow banking. The report concluded that almost three-
quarters of ‘special financial institutes’ were linked to non-financial
multinationals and were hence ‘almost by definition wrongly included
in shadow banking’ by the Financial Stability Board (p. 33, emphasis
added).
What had in the meantime caught the attention of the international
regulatory community was the extent to which shadow banking, inter-
bank funding and tax avoidance overlapped. The arbitrage infrastructure
provided by offshore financial centres appeared to serve multiple func-
tions. It was no coincidence that places like Ireland, Luxembourg, the
City of London, Singapore, Hong Kong and the Netherlands popped up
both in reports of the Financial Stability Board on shadow banking and
in the reports that the Paris-based Organization for Economic
Cooperation and Development was drawing up on aggressive tax plan-
ning (see OECD, 2013). As a result, the Dutch elites linked to this infra-
structure (bankers, accountants, tax advisers, lawyers, owners and
employees of trust firms, politicians, high-ranking civil servants in the
Ministry of Finance, as well as public and private think tanks) suddenly
faced the disconcerting prospect of coming under international regula-
tory pressure from two sides.
Traditionally the Secretary of State for Fiscal Affairs of the Dutch
Ministry of Finance serves as the public guardian and official represen-
tative of the Dutch ‘transfer haven’ industry, no matter his or her polit-
ical affiliation. The tried and trusted tactic was to use information
asymmetries to accuse NGOs and other critics of scaremongering while
insiders (especially tax advisers from EY, KPMG, PwC and Deloitte,
who generate 25 to 36% of the turnover of the ‘Big Four’ in the
Netherlands) have easy access to officials from the Ministry of Finance
and serve regularly as ‘experts’ on official, tax-related committees
Engelen 61

(see Oxfam/Novib, 2016: 22ff.), using every opportunity to set the record
‘straight’: through commissioned and non-commissioned reports, media
appearances, lectures, privately-funded ‘professorships’, participation
in public panels and debates, and op-ed pieces in Dutch newspapers
(in most cases signed off as professor in tax law, not as partner of one
of the ‘Big Four’).
In the post-crisis era of austerity-induced recession, this tactic failed to
work. The political willingness to stomach aggressive corporate tax
avoidance while having to shoulder the full fiscal burden of rescuing
banks quickly faded, resulting in a notable rise in the political salience
of corporate tax issues, both nationally and internationally (see the 2014–
16 media storms over #taxleaks, #luxleaks, #swissleaks and most recently
#panamapapers, unleashed by the International Consortium of
Investigative Journalism). Hence, when the announcement of the
Financial Stability Board in 2012 to clamp down on certain parts of
shadow banking coincided with a similarly G20-mandated clampdown
on tax avoidance, it became obvious to the Dutch elite that a change of
tactics was needed.
In comes Holland Financial Centre, a public-private partnership set
up in 2007 on behalf of a traumatized Dutch banking elite, which had
just witnessed the dramatic takeover of ABN AMRO (the largest, most
global and most venerable Dutch banking group), to further the ambi-
tions of the Netherlands to build ‘a world class international financial
platform’, as its website stated, and partly bankrolled by Dutch
taxpayers through the involvement of the Ministry of Finance and the
municipality of Amsterdam. In July 2012, Holland Financial Centre
commissioned a for-profit economic think tank, the Economic
Research Foundation, loosely affiliated to the University of
Amsterdam, to investigate the Dutch trust industry, its functions, its
relationship with shadow banking as well as its costs and benefits, both
for Dutch taxpayers and for developing economies. The investigation
would be fully supported by the trust industry itself, the municipality
of Amsterdam and the Dutch Central Bank, and would be coordinated
by the Ministry of Finance.
According to the Secretary of State for Fiscal Affairs, it was meant to
finally put public debate on a ‘fact-based footing’ and end ‘misinformed’
political bickering. In other words, this study was to have the final
authoritative say in a public debate marred by strong opinions and
little fact – thus the Secretary of State. Academically-trained economists
would take over where claims-making by self-interested insiders was
perceived as biased and unreliable by an increasingly suspicious elector-
ate. When the widely anticipated report was finally published in July
2013, its main conclusions were that tax avoidance provided the Dutch
economy with more benefits than expected, caused less damage to
developing economies than feared, and generated less risk in Dutch
62 Theory, Culture & Society 34(5–6)

shadow banking than anticipated. Like the earlier report of the Dutch
Central Bank, the Foundation for Economic Research downplayed the
size of Dutch shadow banking, especially compared to the monitoring
exercises of the Financial Stability Board. While the report did identify
some systemic risks flowing from increased complexity and lack of trans-
parency, it concluded that those risks were concentrated in only a small
part (9%) of Dutch shadow banking (financing corporations such as
Lehman Brothers Treasury BV) and that the remainder was relatively
safe and hence did not warrant further regulation (2013: 26).
The report also stressed that, despite the moniker ‘shadow’, there was
actually extensive indirect regulation, although most of it came in the
form of ‘reporting duties’. A paragraph further down, the report noted
that there were good reasons for ‘light touch’ regulation in this specific
area, since shadow banks do not service retail customers falling under an
explicit guarantee scheme (p. 40) – thereby suggesting that regulation was
only required if Dutch taxpayer money was at stake and demonstrating a
stunning lack of concern for global systemic risk issues. That the head
and tail of the credit intermediation chains which passed through the
Dutch transfer haven were located outside the Dutch jurisdiction was
apparently sufficient to proclaim that there were no risks at all.
Even more striking was the fact that the report gave a much more
positive spin to the functionalities of shadow banking than either the
Dutch Central Bank or the Financial Stability Board had until then
dared to do, as was already indicated by the title of the report: ‘Out of
the Shadow of Banking’. This played both on the political role the report
was supposed to play – depoliticizing the issue by throwing light on what
was hidden and hence frightening, to show that there was nothing to be
frightened of – and on the presumed role of credit intermediation by non-
banks to complement the credit channel of licensed banks. ‘Out of the
Shadow of Banking’ hints at the need to further develop something that
is misperceived as ‘shadowy’ and risky into a mature, self-standing credit
intermediation channel. As the report states:

One misconception is that shadow banking is about regulatory arbi-

trage. Such a perspective fails to perceive the functions that shadow
banking fulfils. Securitisation is one. Providing alternative funding
sources to help banks overcome the constraints of their funding
gaps is another. This ensures more competition, lower prices for cap-
ital and hence more efficient credit intermediation markets. A further
benefit of shadow banking is its contribution to more effective risk
management. (SEO, 2013: 11–12, emphasis added)

This rhetorical ploy – which skillfully pulls the sting from a potentially
dangerous metaphor – has since come to define the official thinking on
‘shadow banking’ and received its formal blessing in the summer of 2014
Engelen 63

when Mark Carney, President of the Bank of England and head of the
Financial Stability Board, argued in the Financial Times, for a more
balanced approach to shadow banking:

Our approach to reform recognises that an effective financial system

needs intermediation outside the traditional banking sector. [. . .]
Diversifying sources of finance makes the provision of the credit
that is essential for growth more plentiful and more resilient. [. . .]
The goal is to replace a shadow banking system prone to excess and
collapse with one that contributes to strong, sustainable balanced
growth of the world economy. [. . .] Now is the time to take shadow
banking out of the shadows and to create sustainable market-based
finance. (Carney, 2014, emphasis added)

Carney signed the op-ed off both as central banker and as global regu-
lator, suggesting that his take on shadow banking – which explicitly takes
up the ‘out of the shadows’ metaphor two years before minted by the
Dutch Foundation for Economic Research and reframes it as ‘market-
based finance’ – is now the official view among the international com-
munity of central and financial regulators. It is the monetary equivalent
of a papal blessing (see also Aalbers and Engelen, 2015).
Since then, any incipient contestation over shadow banking has
petered out everywhere. The scarce Dutch media reports on shadow
banking failed to gain any political traction, while the launch in the
fall of 2014 of a so-called Capital Markets Union by the European
Commssion to develop a European carbon copy of the American non-
bank financial ecosystem suggests that European regulators have by and
large adopted Carney’s clever reframing of ‘shadow banking’ as ‘sustain-
able market-based finance’ (EC, 2015; Engelen and Glasmacher, 2016).
Eight years after the crisis, shadow banking has mutated into the solution
par excellence for a broken bank-based credit intermediation system,
while its problematic, after a brief stint in the public limelight, has
again moved to the seminar rooms and conference chambers of the
global regulatory technocracy and its economically trained aides.
It is in large part the effect of the recognition by central banks and
financial regulators that the idealized distinction between bank-domi-
nated Europe and the market-dominated US no longer holds after the
rise of ‘market-based banking’, which denotes a financial ecosystem of
mutually dependent banks and shadow non-banks (Hardie et al., 2013).
The subsequent discursive shift to ‘market-based finance’ followed
almost organically, and gradually travelled from the US (Adrian and
Shin, 2009) to the UK (Carney, 2014) and on to Basel, where the last
FSB report on shadow banking was presented under the title: ‘Progress
Report on Transforming Shadow Banking into Resilient Market-Based
Financing’ (FSB, 2014).
64 Theory, Culture & Society 34(5–6)

Power, Stories, Interests

The puzzle here is strong incentives for political action producing inac-
tion. To put it differently, why was the response to such a large, costly
and discrediting event like the Great Financial Crisis so timid? Any
answer will have to start with a distinction between preferences and
interests. As Lukes (2005) has shown, without such a distinction it
becomes impossible to conceptualize the exercise of elite power through
manipulation and other discursive means. The ability to produce political
inaction hinges crucially on unequally distributed discursive power
resources which allow elites to manipulate citizens into believing that
elite interests serve their preferences (Foucault, 1971; Hall, 1982).
It is in the interstices between preferences and interests that the bur-
geoning literature on ‘framing’ (Lakoff and Jonson, 1980; Lakoff, 2014
[2004]), ‘the manufacturing of consent’ (Burawoy, 1979; Herman and
Chomsky, 1988), ‘the politics of misinformation’ (Edelman, 1967, 1977,
2001), ‘agnotology’ or the intentional production of ignorance (Proctor
and Schiebinger, 2008; Oreskes and Conway, 2010; Slater, 2014) and
‘political (non) decision making through storytelling’ (Engelen et al.,
2011; Froud et al., 2012) is situated. The ability to suppress or deflect
the political articulation of some interests depends crucially on elite cap-
abilities to tell convincing (or distracting or confusing) stories. And what
is perceived as convincing does not so much depend on the ‘truth value’
of these stories as on their ability to tap into preconceived ideas or claim
academic authority.
This is clearly in evidence here. Take the caption with which the 2012
Central Bank Report was presented on its website: ‘Shadow Banking
Less Substantial than Assumed’. This is a textbook example of a so-
called ‘litote’, a figure of speech which negates its opposite (‘substantial’)
to suggest the reverse, i.e. that Dutch shadow banking is negligible and
that those who claim otherwise, for instance the Financial Stability
Board, are misinformed. Or take the rider ‘almost’ before the claim
that the ‘tax management’ stratagems of multinationals fall outside the
definition of ‘shadow banking’: ‘almost by definition’, so not fully, com-
pletely or really? Which causal relationship is being obscured here?
Similar rhetorical techniques were used to qualify the ‘shadowy’
nature and riskiness of Dutch shadow banking. Both reports claimed
that ‘shadow banking’ was a misnomer, for most entities were at least
‘indirectly’ regulated, and even the unsupervised parts provided ‘volun-
tary’ data on an annual and even monthly basis. Moreover, the respon-
sibility for dealing with these risks lay outside the remit of the Dutch
regulator and was hence the responsibility of others.
The same is true for what is the main trope of the two reports, namely
that the excessive nature of ‘Dutch’ shadow banking is not caused by
‘shadow banking’ per se but by tax planning, and that there is thus no
Engelen 65

reason for concern. This borders on the malign. In financialized capital-

ism the distinction between financial and non-financial firms is semantic
at best, as Krippner and others have shown (Krippner, 2005, 2012;
Epstein and Jayadev, 2005). For non-financial firms, playing financial
markets has become almost as important a source of profit as it has
been for banks and other financial firms. Moreover, the cash pools
kept outside home jurisdictions for tax purposes by multinational firms
such as Apple, Starbucks, Google, GlaxoSmithKline and others, and
which have now reached levels of $1.7 trillion for US firms, have – as
has been documented by researchers from the IMF (Poszar, 2011) –
increasingly served as liquidity providers to the shadow banking
system, and have predominantly been able to do so through the Dutch
‘transfer haven’, which accounts for 17 per cent of the offshore annual
profits of US multinationals (Zucman, 2015).
Claiming that Dutch shadow banking is not shadow banking per se
but rather the harmless management of offshore cash pools is either a
token of ignorance – extremely worrying in the case of a supervisor – or
of ‘agnotology’, i.e. the intentional production of ignorance, with the
Dutch Central Bank in the role of ‘merchant of doubt’. Here ‘storytell-
ing’ joins the ‘white coat’ effect of professionally-trained economists
using their academic prestige to sow doubt over the pernicious nature
of shadow banking – just as tobacco firms such as Philip Morris and RJR
Nabisco used ‘science’ to contest the causal link between smoking and
lung cancer (Proctor, 1995).
That aim was even more obvious in the case of the report that was
commissioned by Holland Financial Centre. It explicitly claims that
shadow banking furthers financial innovation and perfects still imperfect
financial markets. As such, it reproduces the pre-crisis tenets of main-
stream finance with its almost religiously held belief in the benevolence of
markets (Nelson, 2001; Sedlacek, 2011). This is unsurprising, given
the professional profile of the think tank that authored the report.
Established in 1949, the Foundation for Economic Research started
out as an economic policy research unit in the progressive tradition of
Dutch econometrics established by Nobel prize-winner Jan Tinbergen.
Its list of directors reads as a family tree of the great and the good in
Dutch economics, which is tight knit, technocratic and mainstream in
orientation (Klamer and Van Dalen, 1996; Van Dalen et al., 2015).
Since its ‘privatization’ in the early 1980s, the foundation has become
a quasi-independent for-profit organization with extra-academic employ-
ment contracts, doing applied economic research for a growing range of
public and private agents. This resulted in a gradual drift away from its
earlier, progressive roots. Instead it adopted the neoconservative, neo-
liberal paradigm of public choice theory, with its sharp distinction
between state and market, its use of market allocation as the theoretical
zero-point of any analysis and its assumption that states only have a role
66 Theory, Culture & Society 34(5–6)

to play in the case of ‘market failures’. Under its last four directors, it
became one of the loudest cheerleaders for neoliberalism, as a recent
reconstruction by the Dutch Scientific Council for Government Policy
(WRR) of the privatization programmes of the 1990s in the Netherlands
has indicated (WRR, 2012).
Recently, the political scientists Carstensen and Schmidt have minted
a threefold analytical distinction between ‘power through ideas’, ‘power
over ideas’ and ‘power in ideas’ which overlaps with the common-sensical
distinction between persuasion (‘power through ideas’), manipulation
(‘power over ideas’) and socialization (‘power in ideas’) (Carstensen
and Schmidt, 2015). The relevant point here is that in many policy
domains, especially complicated and highly technical ones such as
banking and financial market regulation, the opportunity for elites to
pretend to play the game of persuasion while actually playing the
manipulation game is rife. First, because information asymmetries
between insiders and outsiders mean that the chances to be found
out are minimal. The audience frontstage simply has no access to the
backstage.1 Second, because most knowledgeable outsiders (academic
economists) have been coopted through lucrative private and public
sector commissions and other perks. This implies that elite narratives
in these domains serve to make insiders sing from the same hymn
book and can do so with only minimal references to common goods or
public interests.2
Of course, the distinction between consent caused by socialization
and consent manufactured by manipulation also implies a distinction
between preferences and interests – a distinction, moreover, which
should be empirically observable, if only by the absence of political con-
testation despite visible grievances. In this particular case it is not hard to
identify the true interests of Dutch citizens: a safe, less complex, smaller
banking system which contrasts sharply with the large, complicated,
highly-leveraged banking system from before the crisis, which Dutch tax-
payers were forced to bail out to the tune of E130 billion, equivalent to a
quarter of GDP, and was directly responsible for historically unprece-
dented austerity measures to the tune of E52 billion. The absence of pol-
itical contestation over shadow banking can hence reasonably not be
ascribed to willing consent but suggests domination by manipulation.
Nor is it difficult to identify the interests of the Dutch financial elite: a
return to the highly profitable (for insiders) business as usual pre-crisis as
quickly as possible with as little onerous regulation as possible. Clearly,
the reports at stake here provide a storyline that serves the interests of
financial elites and goes against those of citizens. First, by throwing doubt
on worries voiced by foreign actors (e.g. the Financial Stability Board)
and, second, by reframing ‘shadow banking’ as ‘non-bank finance’.
The ‘smoking gun’ is the ‘Out of the Shadow of Banking’ report.3 The
first thing to note is that this was the third report in a row on tax
Engelen 67

avoidance authored by the Foundation of Economic Research. The ear-

lier two had been commissioned by the trust industry itself which, as
manager of the 14,000 shell companies the Netherlands houses, stands
to lose most from any restrictions on the highly profitable Dutch
‘transfer haven’, with its concentrated benefits (approximately E3 billion
annually or 0.5% of Dutch GDP) and diffuse costs (E5.4 billion in for-
gone taxes for other jurisdictions; Oxfam/Novib, 2013; SEO, 2008,
2011a). The earlier reports were meant to help the trust industry to
make an ‘objective’ case for political protection because of its substantial
contribution to Dutch GDP and employment. In their wake, its main
author and then-director has given numerous presentations (to journal-
ists, government agents, Members of Parliament, policy makers, industry
insiders) in which the economic benefits of tax management for the
Netherlands are stressed (and the costs are downplayed), even advising
the trust industry ‘to be good and tell it’, with ‘good’ referring to abstain-
ing from money laundering and terrorism financing (SEO, 2011b).
Unsurprisingly, the fingerprints of the financial elite (banks, law firms,
tax advisers, accountants, trust industry) are all over its pages. The inves-
tigation was conducted under the responsibility of a so-called sounding
board. Of its 14 members one came from the banking industry
(Rabobank), one from the Dutch Ministry of Finance, two from
Holland Financial Centre, two from commercial law firms, two from
the trust industry, while no less than five were partners of accountancy
firms (PwC, KPMG) specializing in tax management. Some of these
doubled as chairs of sectoral interest organizations such as the
National Council of Tax Advisers and Holland Questor, the national
representative of Dutch trust firms.
The dominance of sectoral interests comes even more starkly to the
fore in the list of interviewees (SEO, 2013: 31–2). More than half (18 out
of 34) came from the financial elite: banks (4), accountants (4), trust
offices (5) and law firms (5); 12 were high-ranking civil servants, of
which seven worked for the Central Bank, the rest for the Ministry
of Finance, while only three represented NGOs known to be critical of
shadow banking and tax avoidance. Three interviewees were picked from
the sounding board (the two fiscal specialists and one trust official who
doubled as sectoral interest representatives), granting them two channels
of influence. The remainder represented Tommy Hilfiger, one of the few
examples of a multinational that started out as a shell company to
become a full-fledged subsidiary, to demonstrate the ‘hatching’-effect of
the Dutch trust industry – another legitimating story constructed by
economists serving as ‘organic intellectuals’ for the Dutch ‘transfer
haven’.
It indicates an organized, well-coordinated attempt by identifiable
parts of the Dutch financial elite to construct a cross-sectional coalition
behind a technocratic tale (‘shadow banking is non-bank finance’) that is
68 Theory, Culture & Society 34(5–6)

served up as argumentative persuasion (‘sustainable growth and jobs’)

while it is in fact about discursive domination (i.e. concealing risk, lever-
age, complexity and excessive profits for insiders). The audience here was
not so much the demos of classic democratic theory but rather domestic
and foreign members of the very same regulatory community. Hence the
absence of any post-democratic ‘spectacle’ in parliament or the media.
While the attempt ultimately proved superfluous due to the reframing
of shadow banking in non-bank finance in New York, London and Basel
by the global regulatory elite, the episode illustrates the importance of
storytelling, the strong network linkages between financial elites, aca-
demic economists, the Central Bank and the Ministry of Finance in the
Netherlands, as well as the gullibility of the Dutch business press.4 Not a
single Dutch journalist publicly raised doubts about the ‘objectivity’ of
the SEO report in the light of the composition of its sounding board, its
list of interviewees and its history of backing the trust industry. They
remained silent, looked the other way, or mindlessly repeated the elite
frame.

Lessons for Elite Theory

What lessons can be drawn from this case study? At the surface, it simply
confirms what we already know from similar case studies conducted in
the US (Johnson and Kwak, 2010), the UK (Moran, 1991; Froud et al.,
2012) and the EU (Engelen et al., 2011): elites manipulate electoral
preferences by telling quasi-academic stories and making superficial
references to public goods while actually serving private interests in
maintaining a pre-crisis status quo that allowed them to claim an exces-
sive share of social resources.
In itself, this is a welcome contribution to the literature, which allows
us, despite obvious confirmation biases, to redraw the boundaries of our
population and suggest again that the current conjuncture requires social
scientists to dust off earlier elite theories of the likes of Robert Michels
(1911), Vilfredo Pareto (1935 [1916]), Gaetano Mosca (1933) and
C. Wright Mills (1956), as Savage and Williams already called for in
2008 (see also the Introduction to this special issue). Nevertheless, I do
feel that the case has more to offer to elite theory than merely extending
its scope conditions. In particular, it highlights the need to take tempor-
ality seriously, as is suggested by the two epigraphs adorning this paper.
The Mosca quote talks about how, under conditions of mass
democracy (‘populous societies that have attained a certain level of civ-
ilization’), power bases are never self-evident but are always in need of
legitimation. The ‘political formulas’ Mosca talks about provide precisely
such legitimation in the form of an appeal to a set of widely accepted
norms and principles. The Crouch quote, on the other hand, defines the
post-democratic condition as one where high political references to these
Engelen 69

norms frontstage have been turned into mere ‘spectacle’ because global-
ization, offshoring and financialization have created a technocratic world
backstage which benefits the few and harms the many.
While both quotes hint at an epochal reading – from an age of mass
democracy to an age of post-democracy – I want to use the case pre-
sented here to propose a more conjunctural reading instead. The domain
of finance and banking seems to have shifted in rapid succession from a
working ‘political formula’ to a broken one, with the frantic attempts by
national and international elites to repair it using the discursive power of
elite ‘domination-through-manipulation’ post-crisis being the subject of
the paper.
Under conditions of mass financialization, where households are
increasingly dependent on financial markets for their assets (pensions,
real estate) as well as their liabilities (mortgage debt, student loans), debt
governs mass politics, to play on Lazzarato’s book title (2015 [2013]):
‘financialization simply is the universalization of indebted man’. Before
the crisis the story of ever more perfect financial markets delivering pros-
perity to the many (albeit more to the few) was by and large true. This is
the point of ‘privatized Keynesianism’ (Crouch, 2009) or debt-driven
growth models (Stockhammer and Wildauer, 2015). Pre-crisis, financial
interests and electoral preferences were more or less aligned. Both
favored easy and generous credit: bankers to generate the raw material
for their securitization machines that paid for their profits and bonuses;
the average voter to feed ever more liquidity into housing markets to
perpetuate the housing bubble s/he was riding. Once the crisis broke, the
dream turned into a nightmare. The need to use taxpayers’ money to bail
out insolvent banks revealed that the interests of citizens-as-debtors are,
at root, at odds with those of the financial elite-as-creditors, as the phrase
‘privatizing gains, socializing losses’ nicely captures.
Nine years after the crisis it is unsurprising that easy credit is again
the preferred elite solution to the macroeconomic problems caused by the
debt overhang from the previous housing cycle. Quantitative easing,
subsidies for first time home buyers, tax deductions for parents buying
student lofts for their children, together with attempts under the so-called
Capital Markets Union to resuscitate securitization markets in Europe
to steer funding again to mortgage markets (see Engelen and
Glasmacher, 2016) have stopped the fall of house prices and have set
in motion a new housing cycle which feeds economic recovery in the UK
and the Netherlands. What has changed is the storyline: backstage it is
about calibrating risk measures and capital ratios based on the ideo-
logical presumption that there was nothing intrinsically wrong with
finance pre-crisis and that it is all a matter of technocratically preventing
excesses, while frontstage it is about ‘sustainable growth and jobs’, know-
ing full well that voters don’t care as long as their real estate ‘produces’
equity.
70 Theory, Culture & Society 34(5–6)

This suggests that the need for elite storytelling is not constant over
time but is subject to conjunctures. What is self-evident in the upswing
may become highly contested and in need of intelligent design during the
downswing. What can be left to the cold politics of ‘output legitimacy’
(Scharpf, 1999) and the perpetuum mobile of There-Is-No-Alternative
(TINA) to globalization/financialization/off-shoring when everything
goes according to plan, is desperately in need of elite intervention in
times of crisis. That is what this case study shows: the manoeuvring of
domestic and supranational elites in times of crisis to construct a new
‘political formula’ that may then initiate a next phase of politics on auto-
pilot, relying on mere output legitimacy. Until the next crisis breaks, of
course. And especially in the domain of finance, which under conditions
of financialized capitalism encapsulates an increasing slice of the social
fabric (Lapavitsas, 2014).
Does this imply conspiracy? Ascribing harmful intentions to
elites immediately seems to suggest as much. However, the interests
ascribed here to the Dutch financial elite do not imply a blueprint
for a total makeover of society in the manner of the strategic
capacities sometimes ascribed to the Bilderberg group (Richardson
et al., 2011) or the Mont Pèlerin Society (Mirowski and Plehwe, 2009).
What it does imply is that elites have a strong incentive to reproduce
their positions over time, through whatever means available. Here,
this means that they will defend their privileged positions linked to
business models that have increasingly become contested after the
crisis. While this is done intentionally, implying foresight and a
modicum of rationality, it does not automatically presume the level of
knowledge and long-term planning capacity that is typical of conspiracy
theories.
Elsewhere we have distinguished between rationality and bricolage,
the latter referring to a mode of action that is opportunistic, short-
term oriented and only partially cognitive (Engelen et al., 2010).
Although in this case there were bankers involved in financial innovation,
it fits the wider case of elites involved in story construction just as well.
For here too it is about a new assemblage of existing practices (shadow
banking, securitization, tax avoidance) with new/old/radicalized story-
lines as add-ons – this time, not of perfecting still imperfect markets,
as was the case pre-crisis, but of ‘sustainable growth and jobs’, helping
small-and-medium-sized enterprises and funding the real economy.
Moreover, this is not about a ‘great transformation’ (Blyth, 2002) but
about preventing one, which arguably requires much less strategic cap-
acity. So no conspiracy. But it remains a case of intentional elite manipu-
lation and coordination, as can be deduced from the striking similarities
of the soundbites on shadow banking as market-based finance. They
come from the same hymn book.
Engelen 71

Notes
1. The frontstage/backstage metaphor derives from Erving Goffman (1959),
where frontstage relates to the public role individuals and organizations
play and backstage to a private domain where agents can drop their masks
and show who or what they really are. Here I use the discrepancy between the
two as an avenue of access into the true intentions of the agents.
2. This is similar to the analysis by De Ville and Siles Brugge of the role that
econometric projections of jobs and growth play in the debate on the
Transatlantic Trade and Investment Pact that the European Union and the
United States were (2016) . According to De Ville and Siles Brugge, they have
more to do with the ‘political management of expectations’ under conditions
of uncertainty than with providing hard facts about the future costs and
benefits of TTIP.
3. See Van Evera (1997) for more on ‘smoking gun’ and ‘hoop tests’.
4. That the international business press is not above this either is amply illu-
strated by an analysis of the reporting of the Financial Times on Carney in his
role as president of the Financial Stability Board, as described in Aalbers and
Engelen (2015).

References
Aalbers M and Engelen E (2015) Guest Editorial: The political economy of the
rise, fall and rise again of securitization. Environment & Planning A 47(8):
1597–1605.
Actionaid (2013) FTSE-100 tax haven tracker. Available at: http://www.actio-
naid.org.uk/campaign/ftse-100-tax-haven-tracker (accessed June 2010).
Adrian T and Shin HS (2009) The Shadow Banking System: Implications for
Financial Regulation (Staff Paper 382). New York: New York Federal
Reserve Bank.
Blyth M (2002) Great Transformations: Economic Ideas and Institutional Change
in the Twentieth Century. Cambridge: Cambridge University Press.
Burawoy M (1979) Manufacturing Consent: Changes in the Labour Process under
Monopoly Capitalism. Chicago: University of Chicago Press.
Carney M (2014) The need to focus a light on shadow banking is nigh. Financial
Times, 15 June. Available at: https://www.ft.com/content/3a1c5cbc-f088-
11e3-8f3d-00144feabdc0 (accessed June 2017).
Carstensen MB and Schmidt VA (2015) Power through, over and in ideas:
Conceptualizing ideational power in discursive institutionalism. Journal of
European Public Policy. Available at: http://www.tandfonline.com/doi/full/
10.1080/13501763.2015.1115534 (accessed June 2017).
Crouch C (2004) Post-Democracy. Cambridge: Polity Press.
Crouch C (2009) Privatised Keynesianism: An unacknowledged policy regime.
The British Journal of Politics & International Relations 11(3): 382–399.
De Ville F and Siles Brugge G (2016) The Truth about TTIP. Cambridge: Polity
Press.
DNB (2012) Het Schaduwbankwezen: een verkenning voor Nederland. DNB
Occasional Studies 10(5).
72 Theory, Culture & Society 34(5–6)

EC (2015) Action Plan on Building a Capital Markets Union. Available at: http://
ec.europa.eu/finance/capital-markets-union/docs/building-cmu-action-plan_
en.pdf (accessed June 2017).
Edelman MJ (1967) The Symbolic Uses of Politics. Champaign: University of
Illinois Press.
Edelman MJ (1977) Political Language: Words that Succeed and Politics that
Fail. New York: Academic Press.
Edelman MJ (2001) The Politics of Misinformation. Cambridge: Cambridge
University Press.
Engelen E and Glasmacher A (2016) ‘Simple, transparent and standardized’:
Narratives, law and the interest coalitions behind the European Commission’s
Capital Markets Union (FEPS working paper). Available at: http://www.feps-
europe.eu/assets/498e3de7-cf62-4669-8e1f-6e02a0a5dcf0/ed-engelen-feps-
cmupdf.pdf (accessed June 2017).
Engelen E, Ertürk I, Froud J, Leaver A and Williams K (2010)
Reconceptualizing financial innovation: Frame, conjuncture and bricolage.
Economy and Society 39(1): 33–63.
Engelen E, et al. (2011) After the Great Complacence: Financial Crisis and the
Politics of Reform. Oxford: Oxford University Press.
Epstein G and Jayadev A (2005) The rise of rentier incomes in OECD countries:
Financialization, central bank policy and labour solidarity. In: Epstein G
(ed.) Financialization and the World Economy. Cheltenham: Edward Elgar,
pp. 46–74.
Ertürk I and Solari S (2007) Banks as continuous reinvention. New Political
Economy 12: 369–388.
Fernandez R and Wigger A (2017) Lehman Brothers in the Dutch Offshore
Financial Centre: The role of shadow banking in increasing leverage and
facilitating debt. Economy & Society 45(3/4): 407–430.
Fligstein N and Habinek J (2014) Sucker punched by the invisible hand: The
world financial markets and the globalization of the US mortgage crisis.
Socio-Economic Review 12(4): 637–665.
Foucault M (1971) Orders of discourse. Social Science Information 10: 7–30.
Froud J, et al. (2012) Stories and interests: Agendas of governance before and
after the financial crisis. Governance 25: 35–59.
FSB (2011a) Shadow Banking: Scoping the Issues. Basel: Financial Stability
Board.
FSB (2011b) FSB Report with Recommendations to Strengthen Oversight and
Regulation of Shadow Banking. Basel: Financial Stability Board.
FSB (2012) Global Shadow Banking Monitoring Report. Basel: Financial
Stability Board.
FSB (2014) Progress Report on Transforming Shadow Banking into Resilient
Market-Based Financing. Basel: Financial Stability Board.
G20 (2010) The G20 Summit Leaders’ Declaration. Available at: http://www.g20.
utoronto.ca/summits/2010seoul.html (accessed June 2017).
Goffman E (1959) The Presentation of Self in Everyday Life. New York: Anchor
Books.
Hall S (1982) The rediscovery of ‘ideology’: Return of the repressed in media
studies. In: Gurevitch M et al. (eds) Culture, Society and the Media. London:
Methuen, pp. 56–90.
Engelen 73

Hardie I, Howarth D, Maxfield S and Verdun A (2013) Banks and the false
dichotomy in the comparative political economy of finance. World Politics
65(4): 691–728.
Herman ES and Chomsky N (1988) Manufacturing Consent: The Political
Economy of the Mass Media. New York: Knopf Doubleday.
Helleiner E (2010) What role for the new Financial Stability Board?
The politics of international standards after the crisis. Global Policy 1(3):
282–290.
Johnson S and Kwak J (2010) 13 Bankers: The Wall Street Takeover and the
Next Financial Meltdown. New York: Pantheon.
Klamer A and Van Dalen H (1996) Telgen van Tinbergen: Het verhaal van
Nederlandse economen. Amsterdam: Balans.
Krippner G (2005) The financialization of the American economy. Socio-
Economic Review 3: 173–208.
Krippner G (2012) Capitalizing on Crisis: The Political Origins of the Rise of
Finance. Cambridge, MA: Harvard University Press.
Lakoff G (2014 [2004]) Don’t Think of an Elephant: Know Your Values and
Frame the Debate. New York: Chelsea Green.
Lakoff G and Jonson M (1980) Metaphors We Live By. Chicago: Chicago
University Press.
Lapavitsas C (2014) Profiting without Producing: How Finance Exploits Us All.
New York: Verso Books.
Lazzarato M (2015 [2013]) Governing by Debt (Semiotext(e): Intervention Series
17). Cambridge, MA: MIT Press.
Lukes S (2005) Three-dimensional power. In: Lukes S, Power: A Radical View.
Basingstoke: Palgrave, pp. 108–151.
Mair P (2013) Ruling the Void: The Hollowing of Western Democracy.
New York: Verso Books.
McCulley P (2007) Teton reflections: PIMCO: Global Central Bank Focus.
August/September.
Michels R (1911) Zur Soziologie des Parteiwesens in der modernen Demokratie,
Vol. 21. Leipzig: Werner.
Mills CW (1956) The Power Elite. New York: Oxford University Press.
Mirowski P and Plehwe D (eds) (2009) The Road to Mont Pe`lerin: The Making
of the Neoliberal Thought Collective. Cambridge, MA: Harvard University
Press.
Moran M (1991) The Politics of the Financial Services Revolution: The USA, the
UK and Japan. New York: Macmillan.
Mosca G (1939 [1933]) The Ruling Class. New York: McGraw and Hill.
Nelson RH (2001) Economics as Religion: From Samuelson to Chicago and
Beyond. University Park: Penn State University Press.
OECD (2013) Addressing Base Erosion and Profit Shifting. Paris: OECD.
Oreskes N and Conway EM (2010) Merchants of Doubt: How a Handful of
Scientists Obscured the Truth on Issues from Tobacco Smoke to Global
Warming. London: Bloomsbury.
Oxfam/Novib (2013) De Nederlandse route: Hoe arme landen inkomsten mislopen
via belastingplek Nederland. Available at: http://www.oxfamnovib.nl/
Redactie/Downloads/Rapporten/DeNederlandseRouteBP21052013.pdf
(accessed June 2017).
74 Theory, Culture & Society 34(5–6)

Oxfam/Novib (2016) Nederland belastingparadijs. Available at: http://www.

oxfamnovib.nl/Redactie/Downloads/Rapporten/Nederland_belastingpara-
dijs.pdf (accessed June 2017).
Palan R (2002) Tax havens and the commercialization of state sovereignty.
International Organization 56(01): 151–176.
Palan R, Murphy R and Chavagneux C (2009) Tax Havens: How Globalization
Really Works. New York: Cornell University Press.
Pareto V (1935 [1916]) The Mind and Society, Vol. 1. New York: Harcourt, Brace.
Poszar Z (2011) Institutional cash pools and the Triffin Dilemma of the US
banking system. IMF Working Paper: WP/11/190.
Proctor RN (1995) Cancer Wars: How Politics Shapes What We Know and Don’t
Know About Cancer. New York: Basic Books.
Proctor RN and Schiebinger L (eds) (2008) Agnotology: The Making &
Unmaking of Ignorance. Stanford: Stanford University Press.
Richardson IN, et al. (2011) Bilderberg People: Elite Power and Consensus in
World Affairs. London: Routledge.
Savage M and Williams K (2008) Elites: Remembered in capitalism and forgot-
ten by social sciences. The Sociological Review 56(s1): 1–24.
Scharpf FW (1999) Governing in Europe: Effective and Democratic? Oxford:
Oxford University Press.
Sedlacek T (2011) Economics of Good and Evil: The Quest for Economic Meaning
from Gilgamesh to Wall Street. Oxford: Oxford University Press.
SEO (2008) The Dutch Trust Industry: Facts & Figures. Amsterdam: SEO.
Available at: http://www.seo.nl/uploads/media/2008-25_The_Dutch_Trust_
Industry.pdf.
SEO (2011a) Trust Matters. Amsterdam: SEO. Available at: http://www.seo.nl/
uploads/media/2011-50_Trust_matters_01.pdf (accessed June 2017).
SEO (2011b) Trust Matters [de Trustsector in Economisch Perspectief].
Amsterdam: SEO. Available at: http://www.seo.nl/uploads/media/111124_
Trust_matters_01.pdf (accessed June 2017).
SEO (2013) Uit de schaduw van het bankwezen. SEO-rapport 2013-31.
Slater T (2014) The myth of broken Britain: Welfare reform and the production
of ignorance. Antipode 46: 948–969.
Stockhammer E and Wildauer R (2015) Debt driven growth: Wealth, distribu-
tion and demand in OECD countries. Kingston University Economics
Discussion Paper 2.
Streeck W (2013) Gekaufte Zeit: die vertagte Krise des demokratischen
Kapitalismus: Frankfurter Adorno-Vorlesungen 2012. Berlin: Suhrkamp.
Urry J (2014) Offshoring. Sussex: John Wiley & Sons.
Van Dalen H, Klamer A and Koedijk CG (2015) Het gekantelde wereldbeeld van
economen. Available at: http://www.mejudice.nl/artikelen/detail/het-gekan-
telde-wereldbeeld-van-economen (accessed June 2017).
Van Evera S (1997) Guide to Methods for Students in Political Science.
New York: Cornell University Press.
WRR (2012) Dertig jaar privatisering, verzelfstandiging en marktwerking.
Available at: www.oapen.org/download?type¼document&docid¼431117
(accessed June 2017).
Zucman G (2015) The Hidden Wealth of Nations. Chicago: University of
Chicago Press.
Engelen 75

Ewald Engelen is Professor of Financial Geography at the University of

Amsterdam. His main research topics are financialization, varieties of
capitalism, the politics of the crisis and reconceptualizing the urban econ-
omy. He doubles as a public intellectual in the Netherlands where he is
known for his critical stance towards the euro, trade treaties, and capital
mobility. He was a candidate for the Party of Animal Rights during the
last parliamentary elections in the Netherlands.

This article is part of the Theory, Culture & Society special issue on ‘Elites
and Power after Financialization’, edited by Aeron Davis and Karel
Williams.