From high finance to the debacle: a tale of two wannabe banks

Este artículo tiene como objetivo examinar la influencia de la desregulación neoliberal en el brote de desmutualizaciones que tuvieron lugar en los años noventa. Explora hasta qué punto la desmutualización de dos sociedades de crédito o cajas de ahorros - Northern Rock y Bradford & Bingley- y su consiguiente desaparición, en la estela de la contracción del crédito, ejemplifican características clave del experimento neoliberal, con un énfasis particular en sus modelos de negocio posteriores a dicha desmutualización. En el artículo se argumenta que la desmutualización de Northern Rock y Bradford & Bingley formó parte de un movimiento neoliberal más amplio que tenía como centro a los procesos de financiarización. Al convertirlos en bancos, las antiguas cajas de ahorros consiguieron un acceso mayor a préstamos en los mercados financieros, a nuevos tipos de inversores y a un uso sin restricciones de instrumentos financieros como las titulizaciones. El colapso de Northern Rock y Bradford & Bingley será interpretado a la luz de su acceso a estas nuevas fuentes de financiación y su uso de unos instrumentos financieros que o bien no habían estado disponibles, o eran antitéticos para las operaciones de las cajas de ahorros.This paper aims to examine the influence of neoliberalist deregulation on the rash of demutualisations of the 1990s. It explores the extent to which the demutualisation of two building societies – Northern Rock and Bradford & Bingley – and their subsequent demise in the wake of the credit crunch exemplify key features of the neoliberalist experiment, with a particular focus on their post-mutualisation business models. The paper argues that the demutualisation of Northern Rock and Bradford & Bingley was part of a broader neoliberal movement which had processes of financialisation at its centre. By converting into banks, former building societies gained greater access to wholesale borrowing, to new types of investors and to the unrestricted use of financial instruments such as securitisation. The collapse of Northern Rock and Bradford & Bingley is interpreted in the light of their access to these new sources of funding and their use of financial instruments which were either unavailable for, or antithetical to, the operation of mutual societies

Freedom – what’s in a name? An analysis of the construction of the UK mortgage market in the light of the global financial crisis

This thesis offers a detailed analysis of the politics of neoliberalism and financialization in the context of the UK mortgage market. The analysis addresses an often implied but conceptually and empirically neglected feature in the otherwise booming social sciences literature on financial markets and the global financial crisis: how political struggles shape economic space. It does this against the background of the construction of the UK mortgage market which, as opposed to its American counterpart, is still underresearched. The thesis addresses these shortcomings by engaging the theory of Ernesto Laclau and the associated logics approach of the Essex School of Political Discourse Theory. It provides a detailed genealogical analysis of the transformations in the mortgage market during the three decades leading up to the financial crisis emphasising the significance of hegemonic struggles and ideology in its constitution. Empirically, the thesis investigates the transformation of the mortgage market from a ‘sheltered circuit’ dominated by a building society price cartel in the 1970s to a sphere that is increasingly driven by global financial markets. It is argued that at the heart of these transformations was the neo-liberalist deregulation in the name of the signifier ‘freedom’ which, in the neoliberalist age, became almost exclusively equated with ‘free markets’. The demutualisations of the 1990s are presented as an outcome of neoliberalist deregulation leading to a fundamental shift of power in the market. In return for improved access to capital markets and powered by ideological discourses, the demutualisation of 10 societies resulted in a massive transfer of mortgage assets to the stock market and contributed significantly to the financialization of mortgages. The struggles and resistance surrounding these events illustrate their contingent nature. However, the proposed re-mutualisation of Northern Rock had been squandered amidst a re-affirmation of neoliberalist ideology centring on the market as the best provider of mortgages

De las altas finanzas a la debacle: un relato sobre dos aspirantes a bancos

Este artículo tiene como objetivo examinar la influencia de la desregulación neoliberal en el brote de desmutualizaciones que tuvieron lugar en los años noventa. Explora hasta qué punto la desmutualización de dos sociedades de crédito o cajas de ahorros - Northern Rock y Bradford & Bingley- y su consiguiente desaparición, en la estela de la contracción del crédito, ejemplifican características clave del experimento neoliberal, con un énfasis particular en sus modelos de negocio posteriores a dicha desmutualización. En el artículo se argumenta que la desmutualización de Northern Rock y Bradford & Bingley formó parte de un movimiento neoliberal más amplio que tenía como centro a los procesos de financiarización. Al convertirlos en bancos, las antiguas cajas de ahorros consiguieron un acceso mayor a préstamos en los mercados financieros, a nuevos tipos de inversores y a un uso sin restricciones de instrumentos financieros como las titulizaciones. El colapso de Northern Rock y Bradford & Bingley será interpretado a la luz de su acceso a estas nuevas fuentes de financiación y su uso de unos instrumentos financieros que o bien no habían estado disponibles, o eran antitéticos para las operaciones de las cajas de ahorros

From Demutualisation to Meltdown:A Tale of Two Wannabe Banks

Purpose – This paper aims to examine the influence of neoliberalist deregulation on the rash of demutualisations of the 1990s. It explores the extent to which the demutualisation of two building societies – Northern Rock and Bradford & Bingley – and their subsequent demise in the wake of the credit crunch exemplify key features of the neoliberalist experiment, with a particular focus on their post-mutualisation business models. Design/methodology/approach – The analysis draws on literature that examines the neoliberal development of the financial sector and examines the media coverage of the financial crisis of 2007/2008 to study the discursive and material conditions of possibility for the development and implosion of the business models used by Northern Rock and Bradford & Bingley. Findings – The paper argues that the demutualisation of Northern Rock and Bradford & Bingley was part of a broader neoliberal movement which had processes of financialisation at its centre. By converting into banks, former building societies gained greater access to wholesale borrowing, to new types of investors and to the unrestricted use of financial instruments such as securitisation. The collapse of Northern Rock and Bradford & Bingley is interpreted in the light of their access to these new sources of funding and their use of financial instruments which were either unavailable for, or antithetical to, the operation of mutual societies. Research limitations/implications – The paper comments on the contemporary features and current effects of the 2007/2008 crisis of liquidity, whose full long-term consequences are uncertain. Further research and future events may offer confirmation or serve to qualify or correct its central argument. The intent of the paper is to provide a detailed analysis of the conditions and consequences of building society demutualisation in the context of the neoliberal expansion of the financial sector that resulted in a financial meltdown. It is hoped that this study will stimulate more critical analysis of the financial sector, and of the significance of financialisation more specifically. Originality/value – The paper adopts an alternative perspective on the so-called “subprime crisis”. The collapse of Northern Rock and Bradford & Bingley is understood in relation to the expansion, and subsequent crisis, of financialisation, in which financial instruments such as collateralized debt obligations and credit default swaps were at its explosive centre, rather than to the expansion of subprime lending per se. Demutualisation is presented as a symptom of neoliberalism, a development that, in the UK, is seen to have contributed significantly to the financial meltdown

Logics in Policy and Practice: A Critical Nodal Analysis of the UK Banking Reform Process

Drawing on the ?logics approach? to advance critical policy studies, we contribute to our understanding of the banking reform process in the wake of the financial crisis. We focus on the political and ideological dimensions of this process, paying particular attention to the way the narrow character of associated debates is produced and maintained. We operationalize the logics approach by invoking a ?nodal framework? that apprehends the banking service chain in terms of the nodes of provision, distribution, delivery and governance. Using this logics-cum-nodal framework, and focusing on the work of the Independent Commission of Banking and two left-wing think tanks during 2011 and beyond, we suggest that the master signifier ?stable competition? has served to organize a range of interventions, both organizational and rhetorical, that have marginalized progressive efforts to articulate and promote alternative visions of finance and banking; and that the dynamic interaction between diverse interventions can be grasped ? at least in part ? in terms of their capacity to act as a hinge between concrete visions on the one hand (understood in terms of projected norms and values), and potent affective investments on the other hand (understood in terms of fantasmatic desire)