Capital Market Union and residential capitalism in Europe: Rescaling the housing-centred model of financialization

Abstract

This article examines the effects of implementing the proposals of the European Commission to institute a Capital Market Union (CMU) on the diverse landscape of residential capitalism in Europe. The CMU will bypass existing national institutional blockades that left core countries of the Eurozone, namely Germany, France and Italy, largely untouched by the housing-centred model of financialization that developed in countries like Spain, Ireland, the UK and the Netherlands. It is widely acknowledged that the rise in securitized mortgage debt contributed to the global financial crisis. As part of the CMU, the new European Commission is promoting mortgage securitization throughout the EU and thereby rescaling the political economy of housing finance that was hitherto rooted in national, institutional models. We argue that countries which ‘missed’ the previous housing boom will not be able to prevent future housing-centred financialization. CMU thus signifies a spatial expansion of the debt-led accumulation model.

Introduction To The Forum: From Third To Fifth‐Wave Gentrification

“…At first sight, the role of the state in all this may appear somewhat ambiguous. On the one hand, many state institutions have pushed mortgaged homeownership, the securitisation of mortgages (now also at the international state level ; see Fernandez & Aalbers ) and the spread of REITs. On the other hand, municipalities – that is, the local state – are increasingly trying to regulate Airbnb as well as international capital going into local housing markets.…”

European Union financial integration, a geography perspective

“…Similar to the FSAP in 1999, optimism generated by the return to normal after the Draghi intervention seems to have invigorated financial lobbying (Engelen & Glasmacher, ; see Braun et al, , for overview), including renewed calls for lenience toward securitization (idem, Fernandez & Aalbers, ). Recent directives, MiFID2 (Directive 2014/65/EU, fully transposed 3 September 2018) and PSD2 (Directive EU 2015/2366, transposed 13 January 2018) enable further digitization and platformization of financial services (FinTech).…”

Ceci n’est pas un Capital Markets Union: Re-establishing EU-led financialization

“…Most studies have focused on one particular CMU element, namely the securitization package. The verdict is quite negative, from fears of an upscaling of a problematic housing-centred model of financialization (Fernandez and Aalbers, 2017), critiques of the new securitization label (Engelen and Glasmacher, 2016, 2018; Metz, 2018), the dangers of returning to shadow banking in the search for a single safe asset (Gabor and Vestergaard, 2018), public development banks’ leveraging of EU budgets (Mertens and Thiemann, 2018) and even analyses of policy narratives (Quaglia and Howarth, 2018) – all focus on securitization. All these analyses are crucial; however, by putting the spotlight on this one element, many other policy proposals that are part of the CMU agenda are not sufficiently scrutinized.…”