Departing from the Regulation Approach and the concept of spatio-temporal fixes, this article analyses how different mechanisms of financialization have ameliorated and accelerated crisis-tendencies in the North European forest industry and its implications for labour, suppliers and corporate R&D. Although wood products can potentially ameliorate the climate crisis by substituting plastics, petrochemicals, polyester and various other applications from fossils, firms have been slow to advance into these higher value-added segments. Instead, under an increasingly financialized accumulation regime, innovation has been undermined through R&D downsizing while dividends have been increased to shareholders at labour’s expense. Meanwhile, amid ultra-low interest rates, the industry’s profitability has been supported by appreciating forest assets that are increasingly treated as a new financial asset class by the financial sector. Evidently, while some mechanisms of financialization are detrimental to firms, the financialization of forests has constituted a profitability-enhancing socioecological fix (McCarthy, 2015; Ekers & Prudham, 2017) not only for financial capital (Ekers, 2019) but also for non-financial firms themselves. In the long run, however, it is highly uncertain if forest asset prices can be kept from depreciating amid the problems of profitability, weakened ecological carrying capacity, rising interest rates and strained supplier relations.

Drawing on a Gramscian Regulation Approach and Harvey’s accumulation by dispossession thesis, this article discusses the structural and hegemonic mechanisms of the neoliberal transformation of Sweden’s welfare sectors. Providing new longitudinal data on welfare retrenchment, corporate governance, wealth shares, and private economic power, the article further analyzes how the transformation of the Swedish post-war universal welfare model is related to class struggle and accumulation regime change in the Swedish economy. Following a decade-long countermobilization of Swedish capital and a severe economic crisis in the early 1990s, neoliberal economic common sense was cemented among social democratic policy elites that manifested itself in an institutionalized austerity polity, leading to a slow but steady dismantling of the Swedish welfare project. Roughly a fifth of employees in the three largest welfare sectors work in private welfare companies that generate tax-financed profits on politically created welfare markets. Welfare profits are in turn defended by a welfare–industrial complex and undergirded by a hegemonic bloc consisting of capital elites and sympathetic policymakers. In the virtual absence of vocal antihegemonic forces, many social democratic leaders have limited criticism against welfare profits throughout the last decades. On the contrary, austerity measures practiced by Swedish social democrats have thereto led to deteriorating social cohesion and spawned distrust among core social democratic voters.

This article advances the analysis on how the covered bond, a financial instrument specialized for mortgage lending, contributes to household financialization. By providing financial systems with relatively safe debt instruments and letting banks to efficaciously draw credit on international debt markets, ‘…covered bonds allow banks to lend not only more, but also more safely’ (European Commission, 2018). Zooming in on Sweden, one of Europe’s most financialized economies, the article explores why and how covered bonds were institutionalized and how the instrument has affected mortgage lending, securitization and Sweden’s overall financial system. The covered bond concept was imported by Swedish lobbyists via a European banking forum in the late 1980s. While covered bond legislation were temporarily vetoed by central bankers, instead preferring an advanced securitization industry to develop, lengthy bank lobbying and overall developments in Europe’s political economy convinced policymakers that covered bond legislation was essential to avoid deteriorating financial market competition vis-à-vis other EU member states. All in all, covered bonds have on the one hand halted securitization to develop in Sweden. Meanwhile, by increasing the credit supply, covered bonds have on the other hand proved to be an efficient instrument for household financialization. 

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