Please join us in welcoming Phil Ashton (Associate Professor of Urban Planning & Policy, University of Illinois at Chicago)
Thursday, May 3
The study of financial regulation was among the foundations of urban political economy, which developed a significant vocabulary to conceptualize the role of the state in producing particular forms of social and spatial hierarchy through its postwar regulation of credit. However, this vocabulary has had to evolve through different phases in the development of financial markets, marked since the early 1970s by increasingly volatile international financial flows and the emergence of ‘stateless money.’ This sets the context for this paper, in which I seek to extend an analysis of financial regulation to better understand its contemporary role in structuring the ‘urban problematic’ (Dymski, 2009). I begin by charting changing state strategies relative to credit since the 1970s, arguing that the restructuring of US housing finance has followed a trajectory marked by increasing use of lender-of-last resort and other emergency powers. I then turn to the detailed practices of emergency interventions, arguing that their distinctive orientation towards the circulation of financial risk has made them constitutive of new social structures and spatialities of risk.
I make this argument by examining two critical moments in the recent history of US housing finance: the emergence of the subprime mortgage market out of the late 1980s banking crisis; and the extraordinary interventions of post-2007. A close analysis of these interventions demonstrates that they employ financial instruments and techniques to segment financial institutions and borrowers according to the risks they pose to bank or government balance sheets. As many of these techniques directly map onto earlier configurations of credit risk, emergency interventions come to function as their own form of financial exception or triage – isolating borrower segments or neighborhoods where the speculative development of markets came to ground in the most severe fashion. The results suggest how interventions to secure the safety and soundness of the financial system are setting in motion new geographies of uneven development