The regulation risk: Knowledge, power and authority in international finance

In recent years, the volatility of exchange rates and asset prices in international financial markets has threatened to shred the economic, political, and social fabric of several countries around the world. There appears to be a pattern to the spirals of volatility characteristic of this monetary order. The post-Bretton Woods order operates and reproduces itself through an intertwined and ever-expanding “technology of risk.” This technology simultaneously increases the opportunities for speculative financial activity and provides remedies at the various sites of financial vulnerability revealed by each crisis. The dissertation analyzes the impact of the concept of risk on processes of transnational banking and financial market regulation as well as the “externalities” generated by speculative financial instruments in the developing and emerging market economies. The emergence and proliferation of the technology of risk assessment and management must be read as a technique that operated to increase the homogenization of the financial terrain. As the majority of states began to approach the regulation of risk in a similar and consistent manner, the heterogeneous spaces of defection were marginalized. However, the application of risk technology also elicited resistance; it created new loopholes and opportunities through which financial institutions recouped the flexibility of the networked heterogeneous system that had emerged at the end of the Bretton Woods era. This application of risk technology led to the current cycle whereby financial instruments are perpetually invented to exploit or insure against newly discovered categories of risk. The speculative aspects of risk technology have necessitated the implementation of an extensive and intensive regulatory supervisory network. The endeavor to apply the technology of risk has not diminished the possibility of a systemic collapse; rather these rules have proliferated loopholes, incited the discovery of new risks/speculative opportunities, encouraged mutations in the structure of transnational financial institutions so as to avoid regulation, and mandated the application of risk technology to previously segregated market functions (i.e., securities and insurance markets). In summary, the regime of risk is perpetually amended and expanded as categories of risk are isolated—loopholes emerge, surveillance is made more intensive, and transgression becomes more cunning.