City Research Online

Housing, the Welfare State, and the Global Financial Crisis: What is the Connection?

Schwartz, H. (2012). Housing, the Welfare State, and the Global Financial Crisis: What is the Connection?. Politics and Society, 40(1), pp. 35-58. doi: 10.1177/0032329211434689


Analyses of the global financial crisis that assign causality to the erosion of parts of the welfare state that protected individuals miss the importance of macro level regulation that protected firms and the financial system from itself. Post-Depression macro level regulation of finance prevented the emergence of mismatched maturities where deposits lacked state guarantees, and thus prevented runs on banks or near-banks. A balance sheet approach shows that macro regulation linked long duration liabilities in housing finance (mortgages) to long duration assets (pensions). Deregulation permitted the reemergence of mismatched maturities, providing both a necessary and sufficient condition for the current financial crisis.

Publication Type: Article
Publisher Keywords: welfare state, deregulation, mortgages, pensions, securitization
Subjects: H Social Sciences > HC Economic History and Conditions
J Political Science > JA Political science (General)
Departments: School of Policy & Global Affairs > International Politics
SWORD Depositor:
[thumbnail of Schwartz-housing-welfare-crisis(PaS4).pdf]
Download (580kB) | Preview
Official URL:


Add to AnyAdd to TwitterAdd to FacebookAdd to LinkedinAdd to PinterestAdd to Email


Downloads per month over past year

View more statistics

Actions (login required)

Admin Login Admin Login