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Capital Market Union and residential capitalism in Europe: Rescaling the housing-centred model of financialization

Published online by Cambridge University Press:  09 November 2023

Rodrigo Fernandez  and
Manuel B. Aalbers
Rodrigo Fernandez*
Affiliation:
KU Leuven, Belgium
Manuel B. Aalbers
Affiliation:
KU Leuven, Belgium
*
Corresponding author: Rodrigo Fernandez, Department of Geography and Tourism, KU Leuven, Celestijnenlaan 200E Box 2409, 3001 Leuven, Belgium. Email: rodrigo.fernandez@kuleuven.be
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Abstract

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This article examines the effects of implementing the proposals of the European Commission to institute a Capital Market Union (CMU) on the diverse landscape of residential capitalism in Europe. The CMU will bypass existing national institutional blockades that left core countries of the Eurozone, namely Germany, France and Italy, largely untouched by the housing-centred financialization that developed in countries like Spain, Ireland, the UK and the Netherlands. It is widely acknowledged that the rise in securitized mortgage debt contributed to the global financial crisis. As part of the CMU, the new European Commission is promoting mortgage securitization throughout the EU and thereby rescaling the political economy of housing finance that was hitherto rooted in national, institutional models. We argue that countries which ‘missed’ the previous housing boom will not be able to prevent future housing-centred financialization. CMU thus signifies a spatial expansion of the debt-led accumulation model.

Keywords

FinancializationsecuritizationhousingCapital Market Unionmortgage markets
Type
Article
Information
Finance and Society , Volume 3 , Issue 1 , 2017 , pp. 32 - 50
Creative Commons
Creative Common License - CCCreative Common License - BYCreative Common License - NCCreative Common License - ND
This is an Open Access article, distributed under the terms of the Creative Commons Attribution-NonCommercial-No Derivatives licence (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits noncommercial re-use, distribution, and reproduction in any medium, provided the original work is unaltered and is properly cited. The written permission of Cambridge University Press must be obtained for commercial re-use or in order to create a derivative work.
Copyright
Copyright © The Author(s) 2017

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