2016년 2월 17일 수요일

[발췌: B. Christophers's Banking across Boundaries] Ch 4. America, and Boundaries Breached




※ 발췌 (excerpt):

Chapter 4, America, and Boundaries Breached


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( ... ... ) Yet, crucially, the picture of banking and banking productiveness which the US national accounts conveyed to the country's politicians was wholly different to the one contained in the French and British national accounts of the post-war era. It showed banks as directly productive economic agents. The chapter's aim is to place the physical boundary crossings of US banks─crossing in which US politicians were no less invested, of course─firmly in the context of this conceptual picture. I argue, in essence, that it is no coincidence that the US was the first of the historically-significant Western banking powers to both re-internationalize its banking sector and render banking productive in its national accounts.

  As indicated, the chapter takes us through only the the mid- to late 1970s. I draw the chapter to a close at that particular juncture because of five key developments that we can trace to it, and which account for a meaningful break between the preceding era─considered here─and the succeeding era discussed in Part III. The first two have already been highlighted: the beginnings of international expansion by other countries' banks, in addition to US banks; and the beginnings of the drawn-out process of wholesale international dismantling of cross-border capital controls.

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  All of this, however, is to get ahead of ourselves. Our present focus is principally on the pertinent "conjunctural assemblage" which materialized in the US context between the 1930s and 1970s, and the chapter proceeds by considering each of this assemblage's core constituent elements in turn.
  • The first section looks at the development of US national accounts in the 1930s and 1940s. It is of critical importance, I argue, if unsurprising, that it was in the US that the "banking problem" was first recognized, first articulated as a problem, and first seen as requiring a solution. After tracing the wider political-economic context of the emergence of the US national accounting system, I focus in on this banking problem and the solutions─there was more than one─advanced to resolve it.
  • The second section shifts focus to the intellectual milieu within which emerged not only this envisioning of "productive" banks but of course also─recalling the previous chapter─the parallel envisioning of "productive" capital flows. ( ... ... )
  • The third section assesses the developments in US banking internationalization which the chapter as a whole aims to situate in the context of the representations and worldviews considered in the first two sections. ( ... ... )
  • The fourth and last section of the chapter looks beyond the US context to consider what was happening elsewhere during these two decades{1960s & 1970s}, in respect of both geographical and conceptual boundary crossing by banks. The geographical story, as already indicated, is a very short one, since nonUS banks remained largely nationally-bounded entities. The national accounting story, meanwhile, is slightly longer and considerably more complicated, particularly in view of the publication in 1953 of the first UN System of National Accounts (SNA) in addition to─albeit intended to lead to the harmonization of─the various different national systems. The first of two principal observations here, nevertheless, is simply that in the French and UK national accounts banks continued to be envisioned as unproductive, with no changes in their treatment occurring until the mid-1970s; the production boundary had not yet been hurdled. The second observation gestures more explicitly to Part III of the book. It does so by raising the thorny matter of the incremental difficulties that the internationalization of banking began now to raise for statisticians already confounded by that old National Accounting bugbear,” to use Thomas Rymes's evocative phrase from 1985, of measuring banks' “output.”[n.3]  Banks' crossing of geographical boundaries, in short, made assessment of their crossing of conceptual economic boundaries even more problematic than before. I broach this broad issue by way of a little-known paper from the early 1980s on national accounting in Luxembourg, for what the author describes as the "nightmare" implications of globalized finance for the treatment of banking in the national accounts are ones that, as we will see in Part III, would come to have much wider and deeper pertinence over the following three decades.

4.1 Making Peace with Common Sense   (p. 150)

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  It was in the US, in these very early years of the development of systematic national accounts, that what I have been calling─following Bryan Haig─the "banking problem" was, to the best of my knowledge, first explicitly recognized. The recognition came in a 1932 paper in the bastion of neoclassical economics that was, and is, the ^Journal of Political Economy^ (a misleading name for a journal if ever there was one). The author was the economist Morris A. Copeland, and the article was titled, appropriately, "Some problems in the theory of national income." Foremost among these problems was the one of accounting for banks and their relative contribution to the national economy. Foreshadowing much of the welter of commentary on such matters over not just the following years but the next eight decades, Copeland identified what he saw as the “dilemma” of having to represent the “net-value-product” of banking as “a negative quantity” unless special procedures for treatment of the sector were introduced.[n.5]
[n.5] M.Copeland, "Some problems in the theory of National Income," ^Journal of Political Economy^,40, 1932, pp. 1-51, at p.18.

  (... ... ) In the following paragraphs I will have occasion to refer to three main sets of estimates and their associated methodologies. Two of these were the official government estimate─firstly those produced up to 1946, and secondly those produced from 1947, when the treatment of financial intermediaries was changed─while the third was the NBER's. We will begin with the last of these; but all three, critically, envisioned and represented banks as productive economic agents.

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  In discussing this methodology in a chapter of the first volume of the NBER's ^Studies in Income and Wealth^ series, published the same year, Copeland concluded that Kuznets had "attempted to make peace with common sense."[n.10]  ( ... ... )
 
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  The third and final framework will detain us for longer, since it entailed a fundamental revision to the official US methodology for calculating banks' contribution to national economic output. This revision came in 1947. With measurements of national output using the product method having been added to the existing income-based measurements during the war, it was now possible to estimate banks' product anew. Using the product method, however, brought the "banking problem" even more centrally into the spotlight. Did intermediation constitute a productive service and, if so, how, in the absence of explicit payment for such a service, could the value of the output of this service be estimated?

  The answer, one enshrined in the treatment of banks in the US national accounts from 1947 until as recently as 2003, was spelled out conceptually in a paper by economist Dwight Yntema. This answer was similar to the one offered in the UK and discussed in the previous chapter, in the sense that it used exactly the same method of imputation of output value. But there was a crucial difference, one originating in the fact that Yntema and the Commerce Department members who collaborated with him on the proposed treatment, unlike their UK counterpart, did not regard the "paradoxical" envisioning of banks as unproductive as one they could live with. Such an envisioning would be, Yntema insisted, "thoroughly unacceptable."[n.14]

  What was this crucial methodological difference? In short, the net interest revenue derived from intermediation services, termed now the Imputed Bank Service Charge (IBSC), was to be treated as an input not (as in the UK) of the finance sector itself but of other economic units. These units included both other business sectors and consumers, with the allocation between the two based upon respective levels of deposit ownership.[n.15]  The upshot, in terms of the representation of sectoral value-added in the US production account versus the UK production account, was twofold.
  • First, other business sectors were each shown to generate less value, since, aside from that component deemed consumed by the public, banks' collective net interest revenue was apportioned between those other sectors as deducted inputs. 
  • Second, and most importantly for our purposes, value added by the finance sector was commensurately greater to the tune of the entire IBSC.
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4.2 On the Deep Relevance of a Certain Misquotation in Financial History  (p. 154)


4.3 The Re-internationalization of the US Banking Business  (p. 160)


4.4 Morbid Symptoms and Nightmarish Computations

( ... ... ) In this final section of the present chapter, I address the question of what happened outside of the US from the start of the 1950s (which was as far as the analysis in Chapter 3 proceeded) through to the mid-1970s, which is the point at which Part III of the book picks up the narrative. ( ... ... )

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  Critically, this more negative perspective on what banks ^did^ economically remained embodies in the pictures generated by the French and UK national accounts throughout this period─and embodied too, of course, in the assumptions underlying the production of those statistics. As we saw in the previous chapter, the earliest national accounting systems of France and the UK showed banks as being without output (no measurement was even attempted), and as generating minimal or often "negative" output, respectively. From their inception in the 1940s (the UK) and the early 1950s (France), these systems did not change the way they accounted for the banking sector until decades later, and this despite the United Nations' increasingly influential Systems of National Accounts (SNA)─which we shall consider shortly─offering  not one but ^two^ alternative methodologies for treating intermediation services in particular and thus the banking sector generically, in 1953 (the first SNA) and the in 1968 (the first major SNA revision). French and British national income statisticians ignored these, at least in sofar as banking was concerned, until 1973 and the first substantive change in the treatment of banking in either country's (the UK's) accounts─a change coinciding, not coincidentally, with the break between Parts II and III of this book.

  So, until the early 1970s, there was no move in France or the UK to "make" finance productive, just as there was little evidence of moves to re-internationalize indigenous banking. ( ... ... )

  ( ... ... ) The upshot, where the representation of banking sector output in the national accounts was concerned, was that the Yntema method of dealing with intermediation services and net interest income─in other words, the method used in the US from 1947─was applied, and banks were rendered productive economic institutions accordingly.

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  ( ... ... ) In any event, it was the US system of national accounting, of all existing country-specific systems, that the 1952/53 OEEC/UN system most closely approximated to; and in the case specifically of accounting for the banking sector, this approximation was exact.

  Yet while the US national accounts used the Yntema method of treating financial intermediaries until into the 21st century, the recommendation of this method by the UN, and thus its use ^outside^ America, was relatively short-lived. Despite it being America's favored approach to dealing with the "banking problem," the SNA 1953 treatment received heavy criticism from practitioners in other territories, typically on the grounds that in allocating the IBSC on the basis of levels of deposits ownership it effectively misconceived the main functions of banks.[n.108]  When the UN's SNA underwent its first major revision in 1968, therefore, it was decided that an alternative treatment of banks' nominally "free" services─those financed through margins as opposed to explicit charges─should be recommended.[n.109]  The newly preferred treatment, originating this time out of Norway (and the key persona of the economist Odd Aukrust) rather the US, differed in one key respect from the Yntema/SNA-1953 methodology; and yet, critically, it woo showed banks to be productive economic institutions.[n.110]

  Before highlighting this one key amendment in the recommended UN treatment, it is apposite here, I want to suggest, to recall a dictum of Antonion Gramsci, who famously argued that a historical period during which the old is dying out but the new cannot yet born represents an "interrgnum" in which "a great variety of morbid symptoms appear."[n.111]  I have always liked this quote, the images it helps summon, and the understanding of historical change that it articulates, but I had never happened upon what I considered to be such "morbid symptoms" in my own research─until, that is, I encountered SNA 1968 and its recommended treatment of banks. If we think of national accounts, as I suggested in Chapter 3 we might do, as a technology of representation striving to escape from the dying world of 19th-centiry political economy and its Manichean categories and to embrace instead the brave new world of neoclassicism, then arguably no more morbid symptom of the eternal interregnum inhabited by the national accounting calculus is imaginable than the treatment in question.

  How so? Under SNA 1968, the quantum of the IBSC was to be calculated in exactly the same way as before (i.e. as the differential between banks' intermediation-derived interest earned and interest paid), but instead of being treated partially as final demand and partially as intermediate demand, this imputed output of the banking sector was now to be { considered wholly intermediate consumption and, more pointedly, as the input/expense exclusively of a notional industry sector with no output of its own. That is correct: an imaginary industry supplying no products or services was theorized into being as the "buyer" of banks' intermediation. The "services" of financial intermediaries were still deemed productive outputs, therefore, yet rather than being traceable to other, tangible sectors of the national economy, they now disappeared into what was effectively the black hole of a dummy industry with a negative value-added equal (but opposite in sign) to the IBSC. } 

  The morbidity of this treatment lay in its work of obfuscation. The treatment recognized the "banking problem" that ws the unbearable burden of unproductiveness and its manifestation in the image of the "leech on the income stream." But as opposed to solving the problem (which SNA 1953 had done, however unsatisfactorily), it hid it. It removed the burden of unproductiveness from the shoulders of the banking sector and invented a fictional industry to bear this burden instead. Not surprisingly, many practitioners, not least in the US and Canada, attacked the recommendation for the fudge it was. A later user guide to the Canadian system of national accounts was exacting in its critique: in "assigning the entire [IBSC] to a dummy or fictional industry," SNA 1968 "simply has the effect of transferring the negative output from the banks to a dummy industry," and thus "does not solve the problem but makes it less visible."[n.112]  Peter Hill, a key figure in the construction of the 1993 SNA which replaced the 1968 version (and which we shall consider closely in Chapter 5), called the treatment "expedient" and, hence, "no solution" to the banking problem. "It is debatable," he argued, in terms echoing those earlier used in the UK to justify its own way of handling this problem, "whether inventing an imaginary industry with negative value added is much better than recording negative value added for financial intermediaries. It is certainly much less transparent to users."[n.113]

  We must pay genuinely close heed, I believe, to this SNA 1968 recommendation for the treatment of financial intermediation services, and not only in view of its ungainly and flagrant machinations. Two other factors make it, in man respects, pivotal to the wider arguments of this book. First, despite its self-evident oddity, this method of ascribing a negaive income to an imaginary industry sector has probably been ^the^ most used for financial intermediation services in the entire history of Western national accounting. The UN, as noted, only came up with a new official recommendation in 1993, meaning that SNA 1968 was in place for 25 years. Furthermore, many of those countries which have subsequently adopted the newer UN treatment only did so very recently, and thus a large number of Western nations─Finland, France, Italy, the Netherlands, Norway, and Spain among them─were still using the dummy sector method into the new millennium.[n.114]

  Second, there is something almost exquisitely revealing about the very ^awkwardness^ of this method, and the fact that it is so blatant in its concealment of the banking problem. If I had to tray to capture this revelatory quality in one sentence, I would say that SNA 1968 exemplifies the perennial muddle that Western statisticians have got into in trying to show what simply has never come "naturally" in the national accounting tradition: envisioning banks as productive.

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