Conceptualizing Financial Resilience: The Challenges for Urban Theory

Abstract

This chapter outlines an urban theory of ‘financial resilience’ that accounts for the fact that the concurrent processes of urbanization and financialization render the economic system at once resilient and unstable. The notion of financial resilience thus conceived helps to advance our understanding of the processes of globalized urbanization in an era of financialized capitalism. Rejecting the classical notion of ‘monetary neutrality’, such a theory of resilience highlights that the particular behavioral attributes of a capitalist economy evolve around the (spatial) impact of money, credit and finance upon system behavior. One of my central claims in this regard is that the resilience of the monetary-financial system is an enduring theme that characterizes the historical reality of the American metropolis. The position outlined here envisions establishing ‘financial resilience’ as an analytical concept for urban theory that captures the systemic behavior of capitalist development in terms of the historical and institutional co-evolution of the process of urbanization and the monetary-financial system as a whole. In relating financial resilience to modes of urban capitalist governance and regulation, the discussion of the spatial aspects of financial resilience is cast both in terms of an institutional view of resilience (the resilience of both micro- and macro-level entities) and, in terms of a functional view of resilience (the resilience of funding flows and asset flows).