Skip to Main content Skip to Navigation
Journal articles

Market-based but state-led: The role of public development banks in shaping market-based finance in the European Union

Abstract : This paper examines the European Union’s strategy of governing the economy through financial markets by focusing on the largely unacknowledged role of public development banks, including the multilateral European Investment Bank. It argues that these state-owned financial institutions have moved into a key position in the recent evolution of the European financial system and economic governance. Since the crisis, policy makers have used them to address the intrinsic volatility and excess liquidity of contemporary financial markets, as well as offset the constraints on public investment imposed by institutionalized fiscal austerity. The paper provides evidence for this claim through an analysis of the emergent policy nexus between the Investment Plan for Europe and the Action Plan on Building a Capital Markets Union. Based on official documents and interview data, it specifically traces the risk-sharing devices for small- and medium-sized enterprise and infrastructure finance set up by development banks within these initiatives. Equipped with public guarantees, they have been instrumental for the promotion of securitization markets and public–private partnerships through increased multilevel collaborations among development banks. The anchor role of such quasi-fiscal state actors in shaping capital markets, the paper concludes, has profound political implications, and therefore warrants further scholarly attention.
Document type :
Journal articles
Complete list of metadata

Cited literature [80 references]  Display  Hide  Download

https://hal-sciencespo.archives-ouvertes.fr/hal-02184122
Contributor : Spire Sciences Po Institutional Repository Connect in order to contact the contributor
Submitted on : Monday, July 15, 2019 - 6:04:44 PM
Last modification on : Friday, July 2, 2021 - 1:59:53 PM

File

2018-02-thiemann-market-based-...
Publisher files allowed on an open archive

Identifiers

Collections

Citation

Daniel Mertens, Matthias Thiemann. Market-based but state-led: The role of public development banks in shaping market-based finance in the European Union. Competition and Change, 2018. ⟨hal-02184122⟩

Share

Metrics

Record views

85

Files downloads

432