This dissertation contends that over-the-counter (OTC) derivatives play a central role within con... more This dissertation contends that over-the-counter (OTC) derivatives play a central role within contemporary capitalism. Performing a number of valuable functions, these instruments facilitate the accumulation of capital, deriving new value from existing through the assumption of risk.
Given the significance of OTC derivatives, an exploration of the regulatory framework surrounding these markets provides a valuable means of shedding light on the relationship between economic structures (market) and political authority (state).
Orthodox IPE interpretations have tended to see the market and state as separate and homogenous entities that are connected by a relationship of mutual antagonism. Through an exploration of the regulatory framework prior to and following the Global Financial Crisis (GFC), this dissertation offers a critique of this frame. I argue that the inter-relationship between state and market is more complex than simply being demonstrative of regulatory capture by the largest and most sophisticated private market institutions. Instead, drawing on the importance of both economic ideas and elite narrative, I argue that the pre-crisis regulatory framework, with its emphasis on self-regulation, was shaped by a public / private elite who operated within a dominant free-market intellectual frame and whose governance strategies operated in the context of stable narratives of beneficial financial innovation and of the ʻgreat moderation.ʼ Thus, I argue that the pre-GFC regulation can be characterised more by consensus than capture.
The view that the post-crisis regulatory framework, with financial regulation being brought back under the control of national states, represents a ʻparadigm shiftʼ from what had come before is also challenged. I underline the continuity with the pre-GFC regime and argue that, despite increasing tensions appearing between elites as they seek to create new and stable post-crisis narratives, they have retained considerable influence over the shaping of regulation. Thus the impact of new regulation has been watered down and little attempt has been made to introduce democratic accountability into the system.
I conclude by arguing that the regulation of OTC derivative markets demonstrates the complexity of the state market relationship and that this relationship is better theorized as an ensemble of governance than as an antagonistic relationship between two separate entities.
This dissertation contends that over-the-counter (OTC) derivatives play a central role within con... more This dissertation contends that over-the-counter (OTC) derivatives play a central role within contemporary capitalism. Performing a number of valuable functions, these instruments facilitate the accumulation of capital, deriving new value from existing through the assumption of risk.
Given the significance of OTC derivatives, an exploration of the regulatory framework surrounding these markets provides a valuable means of shedding light on the relationship between economic structures (market) and political authority (state).
Orthodox IPE interpretations have tended to see the market and state as separate and homogenous entities that are connected by a relationship of mutual antagonism. Through an exploration of the regulatory framework prior to and following the Global Financial Crisis (GFC), this dissertation offers a critique of this frame. I argue that the inter-relationship between state and market is more complex than simply being demonstrative of regulatory capture by the largest and most sophisticated private market institutions. Instead, drawing on the importance of both economic ideas and elite narrative, I argue that the pre-crisis regulatory framework, with its emphasis on self-regulation, was shaped by a public / private elite who operated within a dominant free-market intellectual frame and whose governance strategies operated in the context of stable narratives of beneficial financial innovation and of the ʻgreat moderation.ʼ Thus, I argue that the pre-GFC regulation can be characterised more by consensus than capture.
The view that the post-crisis regulatory framework, with financial regulation being brought back under the control of national states, represents a ʻparadigm shiftʼ from what had come before is also challenged. I underline the continuity with the pre-GFC regime and argue that, despite increasing tensions appearing between elites as they seek to create new and stable post-crisis narratives, they have retained considerable influence over the shaping of regulation. Thus the impact of new regulation has been watered down and little attempt has been made to introduce democratic accountability into the system.
I conclude by arguing that the regulation of OTC derivative markets demonstrates the complexity of the state market relationship and that this relationship is better theorized as an ensemble of governance than as an antagonistic relationship between two separate entities.
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Given the significance of OTC derivatives, an exploration of the regulatory framework surrounding these markets provides a valuable means of shedding light on the relationship between economic structures (market) and political authority (state).
Orthodox IPE interpretations have tended to see the market and state as separate and homogenous entities that are connected by a relationship of mutual antagonism. Through an exploration of the regulatory framework prior to and following the Global Financial Crisis (GFC), this dissertation offers a critique of this frame. I argue that the inter-relationship between state and market is more complex than simply being demonstrative of regulatory capture by the largest and most sophisticated private market institutions. Instead, drawing on the importance of both economic ideas and elite narrative, I argue that the pre-crisis regulatory framework, with its emphasis on self-regulation, was shaped by a public / private elite who operated within a dominant free-market intellectual frame and whose governance strategies operated in the context of stable narratives of beneficial financial innovation and of the ʻgreat moderation.ʼ Thus, I argue that the pre-GFC regulation can be characterised more by consensus than capture.
The view that the post-crisis regulatory framework, with financial regulation being brought back under the control of national states, represents a ʻparadigm shiftʼ from what had come before is also challenged. I underline the continuity with the pre-GFC regime and argue that, despite increasing tensions appearing between elites as they seek to create new and stable post-crisis narratives, they have retained considerable influence over the shaping of regulation. Thus the impact of new regulation has been watered down and little attempt has been made to introduce democratic accountability into the system.
I conclude by arguing that the regulation of OTC derivative markets demonstrates the complexity of the state market relationship and that this relationship is better theorized as an ensemble of governance than as an antagonistic relationship between two separate entities.
Given the significance of OTC derivatives, an exploration of the regulatory framework surrounding these markets provides a valuable means of shedding light on the relationship between economic structures (market) and political authority (state).
Orthodox IPE interpretations have tended to see the market and state as separate and homogenous entities that are connected by a relationship of mutual antagonism. Through an exploration of the regulatory framework prior to and following the Global Financial Crisis (GFC), this dissertation offers a critique of this frame. I argue that the inter-relationship between state and market is more complex than simply being demonstrative of regulatory capture by the largest and most sophisticated private market institutions. Instead, drawing on the importance of both economic ideas and elite narrative, I argue that the pre-crisis regulatory framework, with its emphasis on self-regulation, was shaped by a public / private elite who operated within a dominant free-market intellectual frame and whose governance strategies operated in the context of stable narratives of beneficial financial innovation and of the ʻgreat moderation.ʼ Thus, I argue that the pre-GFC regulation can be characterised more by consensus than capture.
The view that the post-crisis regulatory framework, with financial regulation being brought back under the control of national states, represents a ʻparadigm shiftʼ from what had come before is also challenged. I underline the continuity with the pre-GFC regime and argue that, despite increasing tensions appearing between elites as they seek to create new and stable post-crisis narratives, they have retained considerable influence over the shaping of regulation. Thus the impact of new regulation has been watered down and little attempt has been made to introduce democratic accountability into the system.
I conclude by arguing that the regulation of OTC derivative markets demonstrates the complexity of the state market relationship and that this relationship is better theorized as an ensemble of governance than as an antagonistic relationship between two separate entities.