The Making of Finance: Perspectives from the Social Sciences PDF
Preview The Making of Finance: Perspectives from the Social Sciences
The Making of finance Using a variety of theoretical frameworks drawn from the social sciences, the contributions in this edited collection offer a critical perspective on the dominant paradigms used in con- temporary financial activities. Through a detailed study of the organisation and functioning of financial intermediaries and institutions, the contributors to this volume analyse ‘finance in the making’, by shedding light on the structuring of banking and financial systems, on their capacity to prescribe action and control, on their modes of regulation and, more generally, on the process of financialisation. Contributions presented in this volume have been written by authors working within the ‘social studies of finance’ tradition, a research programme that emerged twenty years ago, with the aim of addressing a diversity of financial fieldworks and related theoretical questions. This book, therefore, sheds light on different areas that are representative of contemporary finan- cial realities. Specifically, it first studies the work of financial employees: traders, salespeople, investment managers, financial analysts, investment consultants, etc. but also provides an analysis of a range of financial instruments: financial schemes and contracts, financial deriva- tives, socially responsible investment funds, as well as market rules and regulations. Finally, it puts into perspective the organisations contributing to this financial reality: those developing and selling financial services (retail banks, brokerage houses, asset management firms, private equity firms, etc.), and also those contributing to the regulation of such activities (banking regulators, financial market authorities, credit rating agencies, the State, to name a few). Each text can be read without any specific knowledge of finance; the book is thus addressed to anyone willing to better understand the intricacies of contemporary financial realities. Isabelle Chambost is Associate Professor in Management at the Conservatoire National des Arts et Métiers, Paris, France. Marc Lenglet is Associate Professor in the Department of Strategy and Entrepreneurship at NEOMA Business School, Rouen, France. Yamina Tadjeddine is Professor of Economics at the Université de Lorraine, Nancy, France. The Making of finance Perspectives from the Social Sciences Edited by Isabelle Chambost, Marc Lenglet and Yamina Tadjeddine First published 2019 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2019 selection and editorial matter, Isabelle Chambost, Marc Lenglet and Yamina Tadjeddine; individual chapters, the contributors The right of Isabelle Chambost, Marc Lenglet and Yamina Tadjeddine to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Chambost, Isabelle, editor. | Lenglet, Marc, 1978– editor. | Tadjeddine, Yamina, editor. Title: The making of finance : conventions, devices, and regulation / edited by Isabelle Chambost, Marc Lenglet and Yamina Tadjeddine. Description: 1 Edition. | New York : Routledge, 2018. Identifiers: LCCN 2018011586 | ISBN 9781138498563 (hardback) | ISBN 9781138498570 (pbk.) | ISBN 9781351016117 (ebook) | ISBN 9781351016100 (web pdf) | ISBN 9781351016094 (epub) | ISBN 9781351016087 Subjects: LCSH: Finance. | Banks and banking. | Financial institutions—Law and legislation. Classification: LCC HG173 .M273 2018 | DDC 332—dc23 LC record available at https://lccn.loc.gov/2018011586 ISBN: 978-1-138-49856-3 (hbk) ISBN: 978-1-138-49857-0 (pbk) ISBN: 978-1-351-01611-7 (ebk) Typeset in Bembo by codeMantra conTenTs List of figures ix List of tables x List of contributors xi Acknowledgements xvii Introduction: finance as social science 1 ISABELLE CHAMBOST, MARC LENGLET AND YAMINA TADjEDDINE PART I Critical analysis of mainstream financial theory and its uses 15 1 Financial services: a collection of arrangements 17 YAMINA TADjEDDINE 2 Taming the risk borne by financial products 24 PIERRE DE LARMINAT 3 The political and moral imaginaries of financial practices 30 HORACIO ORTIz 4 The role of financial analysts in the social construction of financial value 37 ISABELLE CHAMBOST 5 Public–private partnerships (PPP) between financing requirements and micro-economic governance: complementary scientific and real-world justifications 44 GéRY DEFFONTAINES vi Contents 6 The risk fluctuation: the consequences of avoiding interest rate risk 57 ANNE EA vAN DER GRAAF 7 What makes a price a price? Commensuration work on financial markets 65 HéLèNE RAINELLI-WEISS AND ISABELLE HUAULT 8 The leptokurtic crisis and the discontinuous turn in financial modelling 77 CHRISTIAN WALTER 9 Beyond performativity, how and why American courts should not have used efficient market hypothesis 90 FRANCk jOvANOvIC PART II Structural dynamics in the financial industry 99 10 Sources of risks in financial innovations: embedded and additional risks in Exchange Traded Funds (ETFs) 101 MOHAMED OUBENAL AND LAURENT DEvILLE 11 Junior stock markets and SMEs: an ideal relation? The case of the Alternative Investment Market 114 vALéRIE REvEST 12 Structures and measures for responsible finance 120 ELISE PENALvA-ICHER 13 Territories of finance: the Parisian case 127 YAMINA TADjEDDINE 14 The workforce and professional training in banks 135 MARNIX DRESSEN 15 Cooperative banking: finding a place for the social in finance? 146 PASCALE MOULévRIER 16 Relationship banking – an “endangered species”? Evidence from Germany 152 EILEEN kELLER Contents vii 17 The future of stock exchanges has a long past: what can we learn from financial history? 161 PAUL LAGNEAU-YMONET AND ANGELO RIvA 18 Compliance and the regulation of practices: a two-fold paradox 169 MARC LENGLET 19 Financial regulation: a question of point of view 176 jACqUES-OLIvIER CHARRON PART III A new system of accumulation 183 20 Sociological domestication of a financial product: the case of derivatives 185 DAvID MARTIN 21 The work of financialisation 192 EvE CHIAPELLO 22 Circuits of trust and money: the resilience of the Italian Credito Cooperativo 201 vALENTINA MOISO 23 Justification and critique in the credit rating system: reaffirming the power of agencies 208 BENjAMIN TAUPIN 24 The function of finance: an ethnographic analysis of competing ideas 216 ALEXANDRA OUROUSSOFF 25 At the very heart of financial dominance: the case of LBOs 226 ISABELLE CHAMBOST 26 The internationalisation of the mutual fund sector and the origin of the financialization: a historical process of production rules 236 CAROLINE GRANIER 27 Conceptualising finance within the capital–labour nexus: asset management as a new zone of social conflict 243 SABINE MONTAGNE viii Contents 28 Democracy and the political representation of investors: on French sovereign debt transactions and elections 250 BENjAMIN LEMOINE 29 Knitting together finance and our daily lives 260 jEANNE LAzARUS 30 Making sense of the economy: a network of debt network coordinated by currency 266 MICHEL AGLIETTA Conclusion: what finance manufactures 270 OLIvIER GODECHOT Index 283 figures 0.1 Financial intermediaries: from savings to financial portfolios 8 0.2 Financial intermediaries: financing of public or private investments 9 0.3 Financial intermediaries: financial market infrastructures 9 5.1 Framework of players and contracts in a PPP 49 5.2 From payment streams to tranching: a form of securitisation 50 6.1 Expected income of bond at point t 61 6.2 Expected income of bond at point t with swap 61 6.3 Discounted value of asset 62 13.1 Employment in Ile-de-France region, between 1993 and 2012 131 23.1 Number of comments addressed to the SEC 211
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