REVIVING THE EUROPEAN SECURITISATION MARKET AFTER THE FINANCIAL CRISIS? REGULATION, LOBBYING AND THE PUBLIC-PRIVATE LEGITIMATION OF FINANCE

Abstract

Reviving the European securitisation market after the financial crisis? Regulation, lobbying and the public-private legitimation of finance 2018 This thesis provides a political economy analysis of the attempted legitimation and reproduction of the European securitisation market over the period 2007-2017. Bank securitisation – the issuance and trading of securities backed by bank assets – was at the heart of the 2008 financial crisis, and nearly collapsed in its aftermath. Although the European Union (EU) sought to strengthen financial stability in light of the crisis, and although securitisation was seen as a dangerous financial product, the European Commission began to promote securitisation after 2013, and elaborated between 2014 and 2017 a series of regulations aimed at reviving securitised products considered simple and safe. Through an examination of the gradual rehabilitation of European securitisation, I explore how legitimation crises and discourses interplay with the reproduction of finance, and how EU state actors have interacted and collaborated with private market actors in the reshaping of European finance. I develop an actor-centred critical political economy framework based on a neo-Gramscian conceptualisation of discourse that is rooted in historical materialism. I trace the evolution of EU and lobby attitude toward securitisation through 37 semi-structured elite interviews and the analysis of EU and financial lobby publications related to securitisation. The thesis makes several original contributions to scholarship. The research finds that although securitisation was largely seen as a cause of the financial crisis, the effects of the crisis, the way it was interpreted and the reactions it triggered reconfigured the modalities of European market-based banking, and remade securitisation a central, if suspicious and contested, tool at the service of large banks’ liquidity and equity needs. Both private and public actors produced discourse that was instrumental in rebuilding securitisation’s legitimacy. Central bankers and regulators eager to facilitate banks’ use of securitisation have been supporters of, and advisors to, the securitisation lobby, and actively participated in lobbying the European Parliament. The diverse pro-securitisation discourse ultimately became audible to a growing share of EU policymakers not because it contained inherently powerful ‘ideas’, but because it was widely circulated and resonated with policymakers’ concerns related to their own positions and the changing economic-political environment of the EU. My findings highlight that securitisation and the financial accumulation it facilitates are dependent on unequal debt relations tied to wider capitalist dynamics; state-backed structures and regulations; and a host of legitimation discourses. These findings speak to literature interested in the evolution of lobby practices and complement the structural financialisation literature with a finegrained analysis of the discursive practices and public-private collaboration that underpin the reproduction of finance. Ultimately, this work highlights the importance of taking into account the capitalist structure, debt relations and (state) actors’ perceptions and discourses when critically debating the future and everyday implications of securitisation and finance.

Date of Award	31 Dec 2018
Original language	English
Awarding Institution	The University of Manchester
Supervisor	Ian Bruff (Supervisor) & Adrienne Roberts (Supervisor)