Navigating Risk in Everyday Life Under Central Bank Forward Guidance and Quantitative Easing

Since the subprime lending related financial crisis of 2007 the central banks in the US and the UK control the price of risk through unprecedented quantitative easing programmes and forward guidance policies.  Such macroeconomic monetary policy activism by independent public institutions have protected heavily indebted households from default on their mortgage loans by keeping the interest burden low and house prices stable.  Saving elderly households however suffer from low returns on their pensions and other safe savings under the central bank policies.  “Help to buy” and “Pensions Reform Act 2014” in the U.K. are two government policies that are introduced to respond to the damages of quantitative easing on household balance sheets.  The cognitive and calculative capabilities of households are further challenged in this post-crisis environment of centrally distributed risk by new macro-prudential powers of the Bank of England that allow BoE to control bank lending for mortgages at its discretion.  Most pre-crisis academic work on financial subjects and marketisation of risk have problematised the cognitive and social vortex within which financialised households were navigating their economies.  Seemingly stable post-crisis markets under the centrally planned central bank policies raise interesting questions of conceptualisation of everyday life risk management.   This paper will investigate the continuities and ruptures in everyday finance that are associated with the transition from pre-crisis marketisation of risk through financial innovation to post-crisis centrally distributed risk under central bank quantitative easing policies.