The UK Infrastructure Bank and the financialization of public infrastructures amidst nationalist neoliberalism

Abstract

Literature on the financialisation of infrastructure gives limited attention to public banks. Since public banks are key state institutions to enable and shape financialisation, more research is needed to show how they mediate financialisation processes amidst evolving social, political and economic pressures. To address the gap in existing literature, this article develops a case study on the UK Infrastructure Bank to examine how the bank enables financialisation whilst maintaining credibility with the United Kingdom's neoliberal-nationalist regime. The findings show that the UKIB is a centralised, technocratic institution which deploys de-risking interventions to attract private investment, including guarantees, equity shares and debt financing. Yet, these interventions enable projects which offer limited public value, such as debt financing to fuel over-investment in fibre broadband markets, or equity investments in infrastructure funds which perpetuate the dominance of short-term, extractive investment logics. To maintain credibility with the neoliberal-nationalist regime, the UKIB's governance strengthens the central government's power over its activities, allowing it to shape the post-Brexit policy agenda and target investment to specific constituencies. While the UKIB boosts the profitability of infrastructure assets for private investors, it also exposes regions to extractive logics that undermine the potential public benefits. The findings show how public banks can be used to coordinate and bolster support for financialisation, yet, the use of de-risking interventions to catalyse financialisation is often at odds with generating long-term public value.

Infrastructure debt funds and the assetization of public infrastructures

“…The roles of national and local state actors in enabling financialization has gained greater recognition. State actors often set the preconditions for financialization, including austerity budgets, historic investment deficits and projected investment needs to reach net-zero targets (McArthur, 2023). Financialization can also emerge from complex central-local government power relations, budgetsetting and devolution processes.…”