The Moral Life of Financial Products: Credit Mortgage and Preference Shares in Spain before and after the Financial Crisis

As economic anthropologists have shown for a while commodities have a social career and experience processes of commoditization, de-commoditization, and re-commoditization (Appaduraï, 1986). Financial products such like credit and stocks happen to be long-lasting commodities with a variable value along their lifetime. Specific context can even reveal their virtues and vices from investor’s standpoint. Then this contribution makes out the processes of moralization, de-moralization and re-moralization experienced by Spanish credit mortgages and “preference stocks” during the last 20 years. Massively issued and supported by a commercial discourse - promising life quality enhancement for households in the 1990s and until the housing and then financial crisis (2007-2010), they became the subject of important social critique and epitomized the widely decried responsibility and immorality of banks and financial institutions.

This contribution relies on a longitudinal analysis of professional, public and mundane discourses at three key moments: around the peak of the issuance curve of the two respective financial products; during the inflexion of post-crisis social (self-labeled “victims”) movements; and during their most recent subsequent re-regulations. Our content analysis specifically indexed: i) the types of actors and legitimacies put forward by each discourse, and then ii) both the ethical registers and the actual/potential everyday experiences of users pointed by theses discourses.

Highly dominated by marketing and professional actors, the moral age of public discourses during the issuance period is characterized by a positive and incentivizing register legitimized sometimes by recent positive experiences of single investors and sometimes abstract simulations though matched with mundane household representation resorting to popular wise topics and sayings. Security and reliability of products are stressed while the risks are positively connoted as conditions for a significant improvement of one’s standards of living. Further, to a large extent, that risks minimization was figured as responsibility in hand of either of the two good faith parties involved: the bank and the subscriber, the professionalism and customer commitment of the first, as well as the prudence and daily discipline of the latter. Each of the products conveyed their own singular morality and daily relevance. For credit mortgage: access to psychological quietness and family/social pride provided by access to property, instead of wasting money and everyday work effort in renting. For preference stock: boosting one’s savings in more dynamic though safe and familiar assets, privileged access to participations in your own bank!

After the burst of the housing bubble and the depreciation of banks assets, some specific aspects of contracts prejudicial to the clients became patent and boosted the previously minority discourse of some specialized activists in civil society or among lawyers that had started questioning these financial instruments during the moral age of the housing and financial bubble.  The popularity of these alternative discourses was clearly supported by the dynamics the global social movement of The Indignates but was not dissolved in a general abstract criticism of the system. The discourses focused on very precise hidden defects (and vices) of the contracts. They also questioned systematically the legitimacy of private professional and regulators with a criticism pointing alternatively their cynic malevolence or their professional ineptitude. The symmetry in technical skills and in legitimacy to inspire regulation was then significantly reestablished in public statements, in favor of the victims. The success of mobilization among citizens was the result of the combination of two ethical register: on the one hand, an ethic of justice appealing to legal terms able to be promoted in several courts (right to housing, children rights, moral commitment to frail individuals, protection of consumer, information dutty…); on the other hand, a relational ethics of care stressing on the everyday implications of these questioned contracts in the life of dozens of nominative citizens, so-called “neighbors” (the failure of their family projects, the sanitary or psychological injures attached to the monetary consequences of contracts evolution. With a constant focus on the sad domestic experiences of household evictions from their houses, some subsequent suicides, the sleep losses, pensioners who couldn’t afford medical service and decent food rations because their savings were “sequestered” by banks through preference shares…).

These moral debates conveyed by the third age of re-regulation are marked by a higher level of awareness of the domestic implications of such financial commitments, and forced a higher accountability and professional responsibility in the edition of all the clauses of the contracts. The European Union average practice and standards happen to be a wise reference to stigmatize national originalities, though the original activists of the second age were not properly supporters of the very liberal and capitalist European Economic Union. This moral life of financial products could be fitting with a conflicting process of maturation, of both Spanish banks, State, and everyday empowered citizens.