The Political Economy of European Securitization Regulation in the Shadow of the Twin Growth and Euro Crises
Marina Hübner (doctoral project)
An important aspect and key driver of financialization is the marketization of financial systems. Marketization, broadly defined, is the growing importance of markets, market-making mechanisms, and thus risk trading in credit intermediation, replacing traditional relationship-based banking. Securitization, a financial innovation that transforms non-tradable loans into interest-bearing securities, is key to this market-based form of finance. Although it caused the global financial crisis, securitization has recently moved to the core of the EU’s growth agenda, being considered an engine for job creation rather than a threat to financial stability. The revitalization of European securitization markets is an important pillar of both the European Capital Markets Union and the Investment Plan for Europe. Building on insights from European integration scholarship and critical political economy, this research identifies the process through which securitization has emerged as the solution to a set of political and economic challenges at the heart of the EMU/the EU. The qualitative process-tracing analysis is based on expert interviews and documentary analysis. The project critically assesses the distributional consequences involved and relates its insights to the broader debate on the post-crisis resilience of marketization processes in the EU. Project duration: October 2014 to March 2018.
Hübner, Marina. 2016. Securitization to the Rescue! The European Capital Markets Union Project, the Euro Crisis and the ECB as "Macroeconomic Stabilizer of Last Resort." Foundation for European Progressive Studies: FEPS Studies, September 2016. [PDF]