Neoliberal Europeanisation, Variegated Financialisation: Common but Divergent Economic Trajectories in the Netherlands, United Kingdom and Germany

Abstract

Revisiting attempts to connect comparative political economy and the geographies of finance, we present a balance sheet analysis of financialisation in the UK, the Netherlands, and Germany from 1992-2012. We define financialisation broadly as a trend towards a greater reliance on assets and/or debt, with particular manifestations across different domains of the economy: a greater reliance on financial tools and metrics for the state and non-financial corporations, a shift to market-based banking and increasing dependence on credit or asset-based welfare for households. We use OECD time-series balance sheet data and qualitative accounts drawn from the literature to overview economic change in our case countries. Using this informal comparison we develop the concept of 'variegated financialisation' by exploring the common but not convergent financialising trajectories of our case countries and relating them to the politics of finance's institutional embedding.

Whither corporate financialization? A literature review

“…Ward et al. (2019, p. 125), for example, deployed a balance sheet approach to capture the “greater reliance on debt‐financing and asset inflation” among NFCs in the United Kingdom, the Netherlands, and Germany for the period 1992–2012. Durand (2017) traced financial asset ratios for 11 “rich countries.” He did not re‐run previous studies' indicators but calculated net financial payments by NFCs to financial markets and found them relatively stable over time—an important reminder to engage with financial flows in both directions of corporate coffers.…”

Why do state-owned utilities become subject to financial logics? The case of energy distribution in Flanders

“…Studies on state financialization have mostly focused on debt management (e.g. Karwowski, 2019; Trampusch and Fastenrath, 2019; Ward et al., 2019), leaving the motives and dynamics of state asset management in a context of financialized capitalism relatively understudied (Bresnihan, 2016; Pike et al., 2019; Schwan et al., 2020). Existing studies on the asset side, however, do speak to the renewed attention for state ownership in debates on state capitalism (Babic et al., 2020), financialized municipal entrepreneurialism (Beswick and Penny, 2018) and the entrepreneurial state (Mazzucato, 2011).…”

European Union financial integration, a geography perspective

“…The FSAP directives allow use of government bonds as collateral, in "repo agreements," stimulating financial institutions to borrow cash to seek high returns on financial markets (Gabor & Ban, 2015). The resulting infrastructure allows the ECB to transmit monetary policy across the European territory through the inter-bank market (Braun, 2018), contributing to the erosion of "variety in capitalism" (Engelen, Konings, & Fernandez, 2010;Ward, Van Loon, & Wijburg, 2018) and the distinction between capital-based and bank-based financial systems (Hardie & Howarth, 2013). In the new modus operandi, the savviest banks engaged in "market-based banking" (idem), scouring the world for profit-generating assets to securitize into tradable financial products (Leyshon & Thrift, 2007;Wainwright, 2015) or trade in these securities.…”