Neoliberalization, financialization and economic citizenship workshop
Neoliberalization, financialization and economic citizenship: one-day workshop
10th October 2007, University of Nottingham
Organized by the School of Geography’s New Economic Geographies Research Theme, this one-day workshop addressed the relationship between processes of neoliberalization, financialization and economic citizenship. The motivation for the workshop was to discuss the implications of the remaking of the contract between individuals and the state in many Euro-American countries, with personal responsibility and markets increasingly becoming the default mode for processes such as welfare provision, short-term income smoothing and long-term financial security. At the same time, there have been increases in economic polarisation, raising concerns about social and financial exclusion. Various concepts have been deployed to help explain such a transformation. This workshop focused upon neo-liberalization and financialization, concepts which share many potential points of contact but which hitherto have tended to run in parallel to one another. Studies of neo-liberalization have proved effective in disciplines such as economic geography where it has informed analyses of welfare reform, the reorganization of labour markets, local government, nature-society relations, etc. Financialisation, which focuses on the growing power and systemic influence of money and finance within contemporary life, has become increasingly significant in fields such as economic sociology and critical management studies. The workshop provided an opportunity to explore the relationship between processes of neoliberalization and financialization, with speakers working in both traditions, and explored the consequences of both for economic citizenship, a contested concept which denotes the ability of individuals and households to participate fully in the economy and produce economic security.
The day was characterised by a series of rich presentations and some fascinating and informative debate.
The workshop’s programme was as follows:
Session 1. Chair: Sarah Hall (University of Nottingham)
Jamie Peck (University of Wisconsin-Madison): ‘Finding the Chicago School’
Shaun French, Andrew Leyshon and Thomas Wainwright (University of Nottingham): ‘Financializing space’
Session 2. Chair: Shaun French (University of Nottingham)
Wendy Larner (University of Bristol): ‘Situating neoliberalism’
Sue Smith (University of Durham): ‘Home ownership: managing a risky business?’
Session 3. Chair: Andrew Leyshon (University of Nottingham)
Paul Langley (University of Northumberland): ‘Neo-liberal financialised subjects’
Adam Swain (University of Nottingham): ‘Neo-liberalizing post-soviet space’
Discussant: Noel Castree (University of Manchester).
The other participants in the workshop were:
Jon Beaverstock (University of Nottingham), Angus Cameron (University of Leicester), James Corah (University of Nottingham), Louise Crewe (University of Nottingham), Gwamaka Kifukwe (University of Nottingham), Karen Lai (University of Nottingham), Roger Lee (Queen Mary University of London), Yajing Li (Queen Mary University of London), Steve Musson (University of Reading), Jane Pollard (Newcastle University), Alison Stenning (Newcastle University), Kendra Strauss (University of Oxford), Adam Swain (University of Nottingham), Thomas Wainwright (University of Nottingham) and Kevin Ward (University of Manchester).
Many thanks to all speakers and participants for contributing to a successful and rewarding day, and to Karen Lai for her invaluable organizational skills!
Andrew Leyshon
RES000220686 – The changing geography of British bank and building society branches, 1995-2003
Funded by the Economic and Social Research Council
Award/Grant Name: The changing geography of British bank and building society branches, 1995-2003.
Award/Grant Holders: Andrew Leyshon, Shaun French and Paola Signoretta.
Duration: June 2004 – May 2005.
For the full End of Award Report, click here.
Non-technical Summary
When banks and building societies close their branches, it can have significant consequences for customers, who may have to incur extra travel costs to make transactions or get face-to-face advice. Closures also engender a sense of loss and abandonment within local communities. This project, by the University of Nottingham, mapped the changing provision of bank and building society branches between 1995 and 2003 – updating research into changes between 1989 and 1995.
Key Findings
Continuous decline
- The branch networks of both banks and building societies have now been in a continuous process of decline over this period.
- Between 1989 and 2003, banks closed 32 per cent of their branches, converted building societies 22 per cent, and building societies 20 per cent. Between 1995 and 2003, banks closed 21 per cent of their branches, converted building societies 19 per cent and building societies seven per cent.
Poor inner cities hit hardest
- Distribution of closures was uneven. The average closure rate for all areas between 1995 and 2003 was 25 per cent. However, the highest rate – more than 30 per cent – was experienced in ‘multicultural metropolitan’ areas, which include poor inner city areas.
- Meanwhile, areas that experienced fewer than average branch closures tended to be more affluent, areas which could safely be described as typically ‘Middle England’.
Market forces
- This long run process of branch closure is a product of a more competitive market for retail financial services, which forces firms seriously to appraise costs against revenues.
- It is also a result of new distribution channels for financial services, such as use of the telephone, developed in the 1980s, and the Internet, from the late 1990s.
- However, perhaps the most significant new channel arose from government moves with the 16 largest banks and biggest building society to ensure basic bank accounts for low-income customers. To facilitate provision to poorer communities, they were made available through post offices. This widens the scope of the retail financial services industry, but was cited as a potential factor in driving further bank closures.
- Closures vary between institutions, with banks in particular being anxious to drive down costs in the face of investor pressure.
Regional distribution
- Lng-run disparities in economic and population growth have contributed to an uneven regional distribution of branches. There is a marked concentration of networks in the South East of England, in contrast to the situation in, say, Wales.
- However, based on branches per population, Wales, the South West and parts of Scotland come out best, while the lowest number per capita are in the East and West Midlands, Yorkshire and Humberside.
About the Study
The project was led by Professor Andrew Leyshon, of the School of Geography, University of Nottingham. It included developing a database of bank and building society branches for the period 1995-2003 for analysis, building on one produced for previous research. Findings were discussed in 15 interviews with leading decision and policy makers, consumer organizations and representatives of mainstream financial services.
Key words
Banking, building societies, financial services, exclusion, communities, inner cities
The buy-to-let market in transition? An analysis of the consequences for, and the robustness of, the buy-to-let market with respect to recent exogenous shocks.
This project is funded by the Financial Services Research Forum.
Duration: April 2008-March 2009
Principal Investigators: Andrew Leyshon and Shaun French
Research Background
The growth of the buy to let (BTL) market is a notable achievement of the UK financial services industry. The re-regulation of the private rented sector in the late 1980s encouraged the Association of Residential Letting Agents (ARLA) and private sector lenders to develop BTL in 1996; by 2007 it accounted for 12% of all mortgage lending in the UK (939,000 outstanding BTL loans collectively valued at £108 billion). The development of the BTL market has produced social benefits, such as the revival of the private rented sector increasing housing tenure choice. It has also enabled the market to respond to the growing demand for rented property as a result of social change, the rapid growth in the number of students, and increases in the number of immigrants in the UK. Moreover, the BTL market has provided an alternative investment channel for those seeking regular returns through rental income and/or long-term financial security through capital gains in the value of property.
BTL has been subject to a number of studies in recent years (for example, Pannel and Heron, 2001; Rhodes and Bevan, 2003; Scanlon and Whitehead, 2005; Thomas, 2006) which suggest that the market is relatively robust, due to the long-term aspirations of BTL investors, lower levels of repossession for BTL mortgages and the fact that BTL borrowers tend to be less highly geared than do first-time buyers. However, despite general optimism such studies have also highlighted a source for concern; the stability of the BTL market will be severely threatened by interest rate rises and/or declines in rental income. We are currently at such a moment of risk due to shifts both in the domestic and international economies. There have been five interest rate rises within the space of a year, while the continued expansion of the BTL sector has seen the supply of property on the market increase, exerting downward pressure on rents. In August 2007, ARLA estimated that 67% of BTL landlords realised a rental return of 5% or less while interest rates are currently at 5.5% (Thomas, 2007), casting doubt on the future growth potential of the market and limiting the scope for remortgaging. In addition, recent problems in the sub prime mortgage market, the crisis in interbank lending, and growing evidence of a credit crunch, means that many financial institutions are assessing their approach to the BTL market. A number of institutions have abandoned the market altogether, while others have reduced their range of BTL products and/or increased interest rates to control for increased exposure to risk. Finally, the burden of regulation has increased, adding to the cost of compliance for BLT landlords. Such changes are taking place against a background of growing public concern about the impacts of the BTL market, such as the crowding out of first-time buyers and the homogenisation of some local housing markets, with implications for the provision of local services such as schools, as families are priced out of some local housing markets in favour of multiple occupancy properties.
Aims
This project aims to undertake a survey of the BTL market in 2008 to determine the implications of interest rate rises, a change in the appetite of financial institutions for the market and increases in the regulatory burden. It will explore the response of the main stakeholders to these changes through a case study of the BTL market in Nottingham, one of the most important markets for BTL outside London (The Guardian, 2007). The sustainability of the BLT market will be determined through an examination of key actors positioned along the BTL value chain, which will include BTL investors, lenders, local government and community groups, and regulators. A desk-based review of extant reports and databases will provide a context for the research through an analysis of the characteristics of buy-to let investors. Through a case study approach the project will combine a focus on broader processes of change with attention to substantive material outcomes through empirical examples. In particular, the research will provide a detailed assessment of the robustness and sensitivity of the BTL market to external shocks and will contain an assessment of its future prospects in terms of its size and value.
Relevance
This research project is relevant to both practice and policy in the field of financial services and will provide critical insight into the consequences of macroeconomic and regulatory change for the BTL market in the UK. Interviews will be conducted across the range of the BTL value chain and will indicate how the market is adapting to exogenous pressures, and will provide pointers to ongoing and future developments. The case study approach will provide an insight into the ways in which the BTL has local impacts, and how both local and national regulators and activists seek to understand this phenomenon.
References
Pannel B, Heron, J, 2001, Goodbye to But-to-Let? Housing Finance, November, 18-25
Rhodes D, Bevan M, 2003, Private Landlords and buy-to-let, Joseph Rowntree Foundation, October (http://www.jrf.org.uk)
Scanlon K, Whitehead C, 2005, The Profile and Intentions of Buy-to-Let Investors, Council of Mortgage Lenders, London
The Guardian, 2007, Nottingham’s forest of housing despair, June 16 (http://money.guardian.co.uk)
Thomas R, 2006, The growth of buy-to-let, Housing Finance, September, 1-14
Thomas D, 2007, Lending slows for but-to-let, Financial Times, October 5 (http://www.ft.com).
More information
Contact Andrew Leyshon (andrew.leyshon@nottingham.ac.uk) or Shaun French (shaun.french@nottingham.ac.uk)
Review: The End of Capitalism (as we knew it)
Book review for Progress in Human Geography, Classics in Human Geography Revisited section (2008)
J.K. Gibson-Graham, 1996, The End of Capitalism (as we knew it): A feminist critique of political economy, (Blackwell, Oxford).
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Review: The Geography of Finance: corporate governance in the global marketplace
Book review for Journal of Economic Geography (2008)
Gordon Clark and Dariusz Wojcik, 2007, The Geography of Finance: corporate governance in the global marketplace, Oxford University Press, Oxford.
The wisdom of crowds?
The announcement yesterday (13.11.07) that MyFootballClub(.com, obviously) have agreed to buy 51% of Ebbsfleet United of the Blue Square Premiership league represented an interesting development in the power of the Internet to mobilize passions and interests in ways that were not really possible before. For those not familiar with the project, MyFootballClub is an experiment in Internet-mediated mass participation. In return for £35, members will be able not only to participate in the governance of the club as a whole but also, extraordinarily, be able to help pick the team for the next fixture through expressing preferences through the website. As many as 20,000 people were sufficiently enthused by this project to stump up the cash which generated a war fund of £700,000 which enabled the MyFootball Club Trust to buy a controlling stake in a team that is in the fifth tier of professional football in England. I am particularly interested in this development for two reasons. First, I am in the process of rewriting a paper on the mobilization of affect and passion within the economy more generally, or what Henry Jenkins (Convergence Culture, 2006, NYUP) has described as ‘affective economics’. The Internet has a particular capacity to mobilize such affective energy, and the geography of the membership of MyFootballClub is testament to this, being drawn from as many as 73 different countries. The second reason that I am interested is that I have to confess that I am one of those 20,000 fee-paying members. I justified my decision to part with £35 on a project that, frankly, seemed like pie-in-sky back in the summer of 2007 when I joined by framing it as a form of research investment. I was working in this area and membership provided me access to the discussion forums and information from the organizers. But as a football fan, I must admit part of me was also keen to have the opportunity to participate in the running of a football club, however fractional that effort would be in light of the overall size of the membership.
How this experiment will work in practice will be interesting to observe; there is more than a suspicion that for many this offers an opportunity to replicate the gameplay of successful PC titles such as Championship Manager and Football Manager, but this time in real life. The fact that the average age of the membership is 27 adds weight to this suspicion (and a gender breakdown of membership would surely confirm that this is project in the main for 20-something men). It’s yet another example of the mobilizing and democratizing potential of digital technology, allowing the participation of actors within a field to which they would otherwise be denied access. The political implications of this will be fascinating too, and I suspect the initial enthusiasm expressed by the club official and Head Coach may well be tempered in time as they struggle to deal with the fact that their livelihoods are strongly influenced by an anonymous public vote. Decisions made in Football Manager have no real consequence; but decisions made in MyFootballClub will. Still, I’m hoping to convince the Head Coach to adopt my adventurous 3-3-1-3 formation, although I suspect that I may be outvoted 19,999 to 1.
About
Andrew Leyshon: economic geographer based at the School of Geography, University of Nottingham.
This is a site where I post unpublished versions of research outputs plus announcements and notices of various kinds.
(Photograph: The Gherkin, viewed between the Lloyds of London and Willis buildings (Andrew Leyshon, 2008)).
