Households at the Frontiers of Monetary Development

Dick Bryan, Michael Rafferty, Bruno Tinel


The Global Financial Crisis and its aftermath has been an extraordinary period of innovation in monetary policy. There has been a dramatic expansion in the scale and scope of monetary intervention (quantitative and qualitative easing (QE and QQE). Moreover, this intervention has evolved so as to target finance itself through central banks coming to operate as ‘liquidity providers of last resort’ and producers of so-called ‘safe assets’ for investors. Policy innovation continues to run ahead of theory, and finance and monetary theorists are still absorbing and debating the implications of these policy innovations. Underlying the new debates about the impacts of particular policies there remains the more abstract question of how money and finance is anchored in the material world and how that anchoring supposedly connects to notions of ‘stability’.
This paper suggests that, beyond the technical policy innovations like QE, one such anchor for monetary stability is being actively sought in an unlikely economic and financial unit – the working class household; specifically in the securitisation of regular household payments. At the core of securitisation is a process of risk shifting to households, and it is the capacity of households to absorb new financial risks that enables both these securities backed by household payments to circulate as ‘safe’ assets, and for this safety to give finance a material anchoring in social relations. The story of monetary development is then about finding and securing a new class dimension to the issue of financial stability.


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