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This thesis draws upon contemporary research in economic geography and the social sciences to explore the spatial relationships that exist between residential mortgage lenders, investment banks and investors and the subsequent geographies that are produced through these intertwined networks. The research is informed through empirical material collected through semi-structured interviews with directors and associates working in the financial sector to see how consumer mortgages are produced and restructured into debt securities. There is a particular focus on how the UK financial sector has undergone restructuring, as a consequence of the politics of financialisation since the 1990s, which aligned the residential mortgage market with the circuits of international capital. The thesis examines three areas of banking and finance to comprehend how retail mortgages have become embedded within international finance. First, the thesis explores how deregulation in the UK initiated a spatial reorganisation of mortgage production networks and funding. Second, the research investigates the migration and adoption of automated decision-making technologies, highlighting how these devices have reshaped the geographies of banking, and are inherently geographical themselves. Third, the thesis focuses on how mortgages are (re)engineered into debt-securities, with a particular focus on how geography is used to mitigate credit and tax risks. It is argued that the restructuring of the UK retail sector and its increased integration with the international circuits of capital exacerbated the exposure of the UK’s economy to the effects of the international credit crunch. Furthermore, the thesis underlines the effect of geography which has shaped the adoption, of new financial technologies and strategies, through local regulations, epistemic cultures and histories.

This thesis explores topics in financial intermediation and macro-finance. In the first chapter, my co-authors and I analyse the structure of the UK repo market using a novel dataset. We estimate the extent of collateral rehypothecation, and address the question of which variables determine haircuts using transaction-level data. We find that collateral rating and transaction maturity have first order of importance in setting haircuts. Banks charge higher haircuts when they transact with non-bank institutions even after controlling for measures of counterparty risk. We examine the structure of the repo market network and we find out that banks with higher centrality measures ask for more haircuts on reverse repos and pay lower haircuts on repos. In the second chapter, I study the real effects of benchmarking in fund management industry in a general equilibrium model where stocks of productive sectors are traded in a competitive equity market. Investors delegate their portfolio decisions to managers whose performance is benchmarked against an index. Managers hedge themselves by tilting their portfolio toward the index which increases the demand and price of the stocks that feature prominently in the index. In equilibrium there is an inefficient shift towards extreme states in which big sectors dominate the economy. I show that in presence of benchmarking, index inclusion is preceded by a rise in firm’s investment rate relative to its capital stock. In the third chapter, I examine balance sheet recessions in a general equilibrium model where agents have heterogeneous beliefs about future technology growth. I show a channel which describes the risk concentration through belief dispersion rather than ad-hoc constraints on aggregate risk sharing. Endogenous stochastic consumption volatility arises from constant fundamental volatility. I study the role of static vis-à-vis dynamic disagreement and examine the effect of financing constraints on the equilibrium when there is belief dispersion among agents.