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This chapter reports on the dynamics of the consolidation of major European banking groups during the period 2000–8, and provides an overview of expansion policies pursued by these groups in recent years. It also considers the impact of the subprime mortgage crisis.

China has been pursuing a development model that is based on supply side expansion, with high savings boosting investment at the expense of consumption. Hence, it has never developed a significant service industry or a financial system capable of channelling savings to consumption via a consumer finance framework. Domestic consumption deficiency has, in turn, pushed the bulk of the industrial capacity towards exports. Since the mid-1990s, when China’s exports became a critical mass in global trade, its economic growth has become dependent on the infinite capacity for debt-financed consumption by US households.

‘One aspect of the affluent consumer society that has largely gone unnoticed by sociologists is the extent to which it rests upon the institution of consumer credit.’ Thus writes David Caplovitz (1969, p. 641), an American University Professor specializing in consumer credit. There could hardly be a better introduction to this chapter which looks at the way consumer credit is practised in the United States.

Chapter 4 provided evidence on giants in the making: the financial services Groups that go beyond the scope of most universal banks as understood in America and in Western Europe. These nascent Japanese versions of financial megatrends bring together not just commercial banking and securities, but also trust banks, regional banks, insurance companies, consumer finance firms and real estate organisations.