The Making of Finance: Perspectives from the Social Sciences

308 Pages·2018·4.543 MB·English

by  Isabelle Chambost (Editor), Marc Lenglet (Editor), Yamina Tadjeddine (Editor)

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