The Macrostructure of Financial Exclusion: Mainstream, Ethnic, and Fringe Banks in Money Space - article ; n°1 ; vol.21, pg 183-201

Gary Dymski, Wei Li

Description

Espace, populations, sociétés - Année 2003 - Volume 21 - Numéro 1 - Pages 183-201
Financial exclusion arises as a social problem when some individuals are systematically denied equal (or any) access to the core financial services required to conduct transactions and provide for future security. This essay contributes to the geographic literature on financial exclusion in two ways: first, we identify some of the micro- and macrostructural determinants of this phenomenon for the U.S. case, including strategic shifts in the banking industry; second, we consider the relationship between financial exclusion and the emerging ethnie banking sector in Los Angeles. In the U.S., financial exclusion takes the form of lower-income and minority households' unequal access to bank accounts, loan markets, and capital accumulation. The U.S. case constitutes an interesting point of departure, as it has a relatively high income but a degree of inequality among the largest in the world. Los Angeles' ethnic banks offer an interesting example, in turn, because this sector has grown to constitute about one-fourth of the banking sector in the county as a whole. We find that increasing financial exclusion is a byproduct of banks' strategic shifts in the wake of deregulation and global financial competition; further, it is very likely to be observed under particular sets of macrostructural circumstances - and these circumstances are especially likely in lower- income areas. Ethnobanks, whose strategic approach often differs from other banks', can help to reverse the extent of financial exclusion in the communities they serve. But because Los Angeles' most successful ethnobanks have undertaken this exclusion- reversing strategic approach in very special macrostructural (and privileged) circumstances, it is possible that this success story is an exception that proves the rule.
Macrostructures de l'exclusion financière : banques grand public et banques marginales dans l'espace financier de Los Angeles.
L'exclusion financière devient un problème social lorsque des individus se voient systématiquement refuser un accès égal, voire tout accès aux services financiers essentiels pour conduire des opérations bancaires et assurer leur future sécurité financière. Les « droits à la ville » signifieraient ici des droits financiers pour des familles pauvres et minoritaires leur permettant de vivre, travailler, survivre et se développer dans les villes américaines. Cet essai vient s'ajouter aux études géographiques portant sur l' ----------- --------------- clusion financière fondée sur la recherche de ses déterminants macro-structurels. Une étude du phénomène d' « ethno-banking » à Los Angeles s'ensuit. L'approche stratégique des banques ethniques est radicalement différente de celle des autres banques en ce fait qu'elle défie les tendances responsables de l'exclusion financière. De cette étude résulte l'observation que ces banques mettent en œuvre leur stratégies sous des conditions macro-structurelles très particulières. Les auteurs concluent en s'interrogeant sur le fait de savoir si la stratégie des banques ethniques propose une alternative à l'exclusion financière ou si, au contraire, cette stratégie ne constitue qu'une exception qui confirme la règle.
19 pages
Source : Persée ; Ministère de la jeunesse, de l’éducation nationale et de la recherche, Direction de l’enseignement supérieur, Sous-direction des bibliothèques et de la documentation.

Sujets

• Sociologie, société et politique

Informations

• Publié par: ESPACE-_POPULATIONS-_SOCIETES
• Publié le: 01 janvier 2003
• Nombre de lectures: 25
• Langue: English
• Poids de l'ouvrage: 2 Mo

Extrait

Gary Dymski
Wei Li
The Macrostructure of Financial Exclusion: Mainstream, Ethnic,
and Fringe Banks in Money Space
In: Espace, populations, sociétés, 2003-1. Diversité des populations d'Amérique du Nord. pp. 183-201.
Citer ce document / Cite this document :
Dymski Gary, Li Wei. The Macrostructure of Financial Exclusion: Mainstream, Ethnic, and Fringe Banks in Money Space . In:
Espace, populations, sociétés, 2003-1. Diversité des populations d'Amérique du Nord. pp. 183-201.
doi : 10.3406/espos.2003.2072
http://www.persee.fr/web/revues/home/prescript/article/espos_0755-7809_2003_num_21_1_2072Abstract
Financial exclusion arises as a social problem when some individuals are systematically denied equal
(or any) access to the core financial services required to conduct transactions and provide for future
security. This essay contributes to the geographic literature on financial exclusion in two ways: first, we
identify some of the micro- and macrostructural determinants of this phenomenon for the U.S. case,
including strategic shifts in the banking industry; second, we consider the relationship between financial
exclusion and the emerging ethnie banking sector in Los Angeles. In the U.S., financial exclusion takes
the form of lower-income and minority households' unequal access to bank accounts, loan markets, and
capital accumulation. The U.S. case constitutes an interesting point of departure, as it has a relatively
high income but a degree of inequality among the largest in the world. Los Angeles' ethnic banks offer
an interesting example, in turn, because this sector has grown to constitute about one-fourth of the
banking sector in the county as a whole. We find that increasing financial exclusion is a byproduct of
banks' strategic shifts in the wake of deregulation and global competition; further, it is very
likely to be observed under particular sets of macrostructural circumstances - and these circumstances
are especially likely in lower- income areas. Ethnobanks, whose strategic approach often differs from
other banks', can help to reverse the extent of financial exclusion in the communities they serve. But
because Los Angeles' most successful ethnobanks have undertaken this exclusion- reversing strategic
approach in very special macrostructural (and privileged) circumstances, it is possible that this success
story is an exception that proves the rule.
Résumé
Macrostructures de l'exclusion financière : banques grand public et banques marginales dans l'espace
financier de Los Angeles.
L'exclusion financière devient un problème social lorsque des individus se voient systématiquement
refuser un accès égal, voire tout accès aux services financiers essentiels pour conduire des opérations
bancaires et assurer leur future sécurité financière. Les « droits à la ville » signifieraient ici des droits
financiers pour des familles pauvres et minoritaires leur permettant de vivre, travailler, survivre et se
développer dans les villes américaines. Cet essai vient s'ajouter aux études géographiques portant sur
l' ----------- --------------- clusion financière fondée sur la recherche de ses déterminants macro-structurels.
Une étude du phénomène d' « ethno-banking » à Los Angeles s'ensuit. L'approche stratégique des
banques ethniques est radicalement différente de celle des autres banques en ce fait qu'elle défie les
tendances responsables de l'exclusion financière. De cette étude résulte l'observation que ces banques
mettent en œuvre leur stratégies sous des conditions macro-structurelles très particulières. Les auteurs
concluent en s'interrogeant sur le fait de savoir si la stratégie des banques ethniques propose une
alternative à l'exclusion financière ou si, au contraire, cette stratégie ne constitue qu'une exception qui
confirme la règle.Department of Economics DYMSKI Gary University of California-Riverside
900 Avenue
Riverside, CA 92521
États-Unis
[e-mail]
Department of Geography Wei LI
Arizona State University
Box 874603
Tempe, AZ 85287-4603
États-Unis
[e-mail]
The Macrostructure of
Financial Exclusion:
Mainstream, Ethnic, and
Fringe Banks in Money Space
gations (Pollard, 19%; Dymski and Veitch,
1996; and Leyshon and Thrift, 1998) have Financial when denied some equal exclusion (or individuals any) arises access as are to a social systematically the core problem finan
attributed financial exclusion to the banking
cial services required to conduct transactions industry's upmarket/downmarket bifurcation.
and provide for future security. This study These geographic explorations augment the
focuses on financial exclusion in the U.S., long-established sociological and economic
where it takes the form of lower-income and literature on racial discrimination and redlin
households' unequal access to for ing in credit markets. That literature shows minority
that banks' decisions on whether to provide mal-sector bank accounts and loan markets,
and hence to capital accumulation. Excluded credit are often systematically influenced by
households' transaction and credit services borrower race and/or location (after control
are instead accomplished through informal- ling for other factors). The notion of financial
exclusion provides a closely linked result by sector ("fringe") banks, often at substantially
higher costs. Households without bank showing that minority households are also
accounts are unable to generate financial sav much more likely to be denied access to the
ings; those without access to credit have less full range of formal-sector financial services
per se, especially bank accounts. So the ability to accumulate wealth by acquiring
housing and/or business assets. This denial of dynamics of credit-market discrimination and
access, then, worsens a problem of economic of financial exclusion are self-reinforcing.
polarization that is among the most profound Two sets of forces which lead to financial
among the nations of the earth. exclusion in particular urban spaces are
This essay contributes to geographic investi emphasized here: the evolution of the finan
gations on financial exclusion by investigat cial industry, and especially commercial
banking; and the logic of urban spatial develing its macrostructural determinants, using
the U.S. as a case example/Previous opment. This paper links together these two 184
logics. This linkage demonstrates that there is munities located quite near to Asian eth-
a key spatial dimension to financial exclu nobanking clusters have very different levels
sion. Certainly, one impetus for changes in of formal and informal banking services.
banking strategy and hence for financial We proceed by first summarizing evidence
exclusion is the enhanced financial competit about the extent of financial exclusion. We
ion triggered by globalization and deregulat then relate financial exclusion to the strategic
ion. However, this alone is not sufficient to shift in banking. Next, we turn to some ideas
explain financial exclusion: for our research about intra-regional flows of goods and ser
on ethnic banking and other evidence sug vices, rooted in a spatialized version of the
gests that all banks have not followed mega- Sraffian production model. These are linked
banks in increasing fees and minimum to a spatial conception of financial fragility,
which shows that urban subareas' wealth- account balances. Our studies of Asian
American ethnic banks in Los Angeles sug accumulation prospects are linked to the
gest that these banks operate differently; the locus of financial and goods-and-services
question then is why? The answer we suggest flows within the city. We then show that
here is that these ethnic banks are operating financial exclusion is typically linked to a
under a very special set of macrostructural particular set of macrostructural circums
circumstances regarding financial and goods- tances. Next, the case of ethnobanking in
Los Angeles is considered. Ethnobanks' and-services flows in urban space. These spe
cial have, at least temporarily, strategic approach is quite different than that
created a different set of strategic options for of other banks, cutting against the trends that
these banks than for other financial intermed generate financial exclusion as one outcome.
iaries. These special circumstances make it We note that these banks have undertaken
unclear whether other urban communities can this strategic approach under very special ethnobanks' induce banks to follow these macrostructural conditions. We conclude by
lead. Evidence from the San Gabriel speculating about whether ethnobanks' Valley
(SGV), which constitutes the heart of the approach constitutes an alternative to finan
Asian Pacific Islander clusters serviced by cial exclusion, or instead represents the
the Asian ethnobanks, shows that even exception that proves the rule.
THE SCOPE OF FINANCIAL EXCLUSION
How widespread a problem is financial (linked in turn to the heightened pace of
exclusion in transactions -