Governing an Unknown Future: Discourses of Risk in the International Regulation of the Financial Services Sector

Abstract

<p> International financial regulation has increasingly focused on 'risk-based' management over the last decade. In general, risk is a term embodied with the notion of an uncertain future and a belief that the use of rational and calculative practices can reveal, measure, and manage these potential futures. This dissertation argues that at the macro level financial governance is permeated with a tension between two overarching discourses of risk-risk as an economic necessity and risk as a danger or threat. These two macro-discourses influence and/or legitimize various courses of action in a general way that in some respects is similar to the role played by ideas in other approaches. However these macro-discourses do not only guide the regulatory actors involved. By drawing out the links between these discourses and the performative risk practices they constitute, this dissertation reveals how risk discourses operate in an ongoing way through the practical implementation of regulatory strategies, which implicitly or explicitly play one macro-discourse off the other. Moreover, the risk practices created, which include mundane, routine, and highly technical activities, work to construct the everyday performance offinancial governance and the identities of those actors included and excluded from the system.</p> <p> To examine this relationship, the dissertation looks at the international governance efforts of three financial areas: banking capital adequacy requirements, reinsurance and collective investment schemes. In the process, it reveals that the focus on risk in regulation creates some generalities across the realm of financial governance, but also that the micro-practices, identities and power produced in each arena are distinctive. It argues that by interrogating the macro-discursive constructions of risk and the practices and identities constituted through them, key tensions are revealed which, at least in part, explain the structure and goals of international financial regulation.</p>