The Great De-Mortgaging: the Retreat of Life Insurances From Housing Finance in US-German Historical Perspective
Recent research in economic history has found that mortgage debt in relation to GDP has taken off in the historical long run (“great mortgaging”), as growing banking assets have been redirected into mortgage credit. This paper maps the parallel long-run investment history of private (life) insurance...
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| Format: | Article |
| Language: | deu |
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De Gruyter
2022-05-01
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| Series: | Jahrbuch für Wirtschaftsgeschichte |
| Subjects: | |
| Online Access: | https://doi.org/10.1515/jbwg-2022-0008 |
| _version_ | 1827309661541367808 |
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| author | Kohl Sebastian |
| author_facet | Kohl Sebastian |
| author_sort | Kohl Sebastian |
| collection | DOAJ |
| description | Recent research in economic history has found that mortgage debt in relation to GDP has taken off in the historical long run (“great mortgaging”), as growing banking assets have been redirected into mortgage credit. This paper maps the parallel long-run investment history of private (life) insurance as the much overlooked second pillar of the financial system. Drawing on in-depth studies of the US and Germany, it finds that a “great de-mortgaging” took place in insurers’ portfolios, with mortgages falling from up to 90 percent in the 19th century to below 5 percent today in favor of fixed-income securities. A parallel shift to secondary mortgage bonds has hardly offset this decline, while direct real estate remained largely a residual investment class. Banks’ great mortgaging is thus partly an institutional substitution effect. The paper sees insurers’ asset shift itself as mainly driven by long-run changes in capital demand and competition with banks and pension funds. It extends these findings to other long-term institutional investors and other OECD countries in the historical long run. |
| first_indexed | 2024-04-24T19:46:21Z |
| format | Article |
| id | doaj.art-77328f0e2aae4479a94dbdb02842e80d |
| institution | Directory Open Access Journal |
| issn | 0075-2800 2196-6842 |
| language | deu |
| last_indexed | 2024-04-24T19:46:21Z |
| publishDate | 2022-05-01 |
| publisher | De Gruyter |
| record_format | Article |
| series | Jahrbuch für Wirtschaftsgeschichte |
| spelling | doaj.art-77328f0e2aae4479a94dbdb02842e80d2024-03-25T07:28:54ZdeuDe GruyterJahrbuch für Wirtschaftsgeschichte0075-28002196-68422022-05-0163119923110.1515/jbwg-2022-0008The Great De-Mortgaging: the Retreat of Life Insurances From Housing Finance in US-German Historical PerspectiveKohl Sebastian0Max Planck Institut für Gesellschaftsforschung, Paulstr. 3, D-50676 Köln and FUBerlinGermany(John-F.-Kennedy Institut)Recent research in economic history has found that mortgage debt in relation to GDP has taken off in the historical long run (“great mortgaging”), as growing banking assets have been redirected into mortgage credit. This paper maps the parallel long-run investment history of private (life) insurance as the much overlooked second pillar of the financial system. Drawing on in-depth studies of the US and Germany, it finds that a “great de-mortgaging” took place in insurers’ portfolios, with mortgages falling from up to 90 percent in the 19th century to below 5 percent today in favor of fixed-income securities. A parallel shift to secondary mortgage bonds has hardly offset this decline, while direct real estate remained largely a residual investment class. Banks’ great mortgaging is thus partly an institutional substitution effect. The paper sees insurers’ asset shift itself as mainly driven by long-run changes in capital demand and competition with banks and pension funds. It extends these findings to other long-term institutional investors and other OECD countries in the historical long run.https://doi.org/10.1515/jbwg-2022-0008insuranceeconomic historymortgageshousingversicherungwirtschaftsgeschichtehypothekenwohnungsmärkteg 22n 20 |
| spellingShingle | Kohl Sebastian The Great De-Mortgaging: the Retreat of Life Insurances From Housing Finance in US-German Historical Perspective Jahrbuch für Wirtschaftsgeschichte insurance economic history mortgages housing versicherung wirtschaftsgeschichte hypotheken wohnungsmärkte g 22 n 20 |
| title | The Great De-Mortgaging: the Retreat of Life Insurances From Housing Finance in US-German Historical Perspective |
| title_full | The Great De-Mortgaging: the Retreat of Life Insurances From Housing Finance in US-German Historical Perspective |
| title_fullStr | The Great De-Mortgaging: the Retreat of Life Insurances From Housing Finance in US-German Historical Perspective |
| title_full_unstemmed | The Great De-Mortgaging: the Retreat of Life Insurances From Housing Finance in US-German Historical Perspective |
| title_short | The Great De-Mortgaging: the Retreat of Life Insurances From Housing Finance in US-German Historical Perspective |
| title_sort | great de mortgaging the retreat of life insurances from housing finance in us german historical perspective |
| topic | insurance economic history mortgages housing versicherung wirtschaftsgeschichte hypotheken wohnungsmärkte g 22 n 20 |
| url | https://doi.org/10.1515/jbwg-2022-0008 |
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