Why didn’t Europe securitise more? The institutionalisation of covered bonds as an efficient instrument for financialisation

This article analyses an overlooked financial instrument in political economy, despite its institutionalisation having immense ramifications for European markets: the covered bond. Following decades of cross-continental bank lobbying led by German mortgage banks, bonds transformed from a ‘little-understood corner bond market’ mid-1990s into global multi-trillion dollar market years prior to Global Financial Crisis. highlights that bonds, on one hand, stabilise and de-risk financialised capitalism providing credit institutions with stable means financing collateral while investors safe investment opportunities, including during periods crisis. In addition, expansion markets has marginalised securitisation much Europe. On other fuel household indebtedness increasing supply available lending, which is primary activity contemporary banking general issuers particular. The can therefore be perceived as more simple, efficient financialisation compared crisis-prone residential mortgage-backed derivative.