From ESA – Strategies & Activities

President's Message Sue Scott
ESA Office Communiqué – Andreia Batista Dias Andreia Batista Dias
ESA Office Communiqué – Dagmar Danko Dagmar Danko
ESA Office Communiqué – Gisèle Tchinda-Falcucci Ricca Edmondson
13th ESA Conference Report Athens 2017 – ESA Christian Fuchs
13th ESA Conference Report Athens 2017 – LOC Apostolos G. Papadopoulos
PhD Summer School Athens 2017 Airi-Alina Allaste
ESA Journals News – European Journal of Cultural and Political Sociology Ricca Edmondson
ESA Journals News – European Societies Michalis Lianos
RN Reports – RN06 Critical Political Economy Angela Wigger
RN Reports – RN15 Global, Transnational and Cosmopolitan Sociology Marco Caselli
RN Reports – RN33 Women’s and Gender Studies Consuelo Corradi
NA Reports – Austrian Sociological Association (OeGS) Martin Weichbold
NA Reports – Croatian Sociological Association (CSA) Jasminka Lažnjak
NA Reports – Danish Sociological Association (DSF) Anna Ilsøe
NA Reports – Italian Sociological Association (AIS) Enrica Amaturo
NA Reports – Lithuanian Sociological Association (LSA) Milda Ališauskienė
NA Reports – Portuguese Sociological Association (APS) João Teixeira Lopes
NA Reports – Swiss Sociological Association (SSA) Rainer Diaz-Bone
Thesis Spotlights – The spreading of hostility: Unraveling of social norms in communication Amalia Alvarez Benjumea
Thesis Spotlights – Aspirations, Attainments & Strategies: Descendants of Middle Eastern Immigrants on the Swedish Labour Market Pinar Aslan
Thesis Spotlights – Gendered Childhood, Media Beauty Ideals and the Role of Education Galatia Kallitsi
Thesis Spotlights – Discursive Construction and Materiality of Debt in Context of Housing: Forming Semi-Financialized Subjects Tomáš Samec
Thesis Spotlights – Controlling risks or continuously preventing the worst? Risk management in large financial organisations Anne van der Graaf

Thesis Spotlights – Controlling risks or continuously preventing the worst? Risk management in large financial organisations

Issue 41: Metrics Wed 18 Apr 2018

Anne van der Graaf, PhD student, France

Email: anne.vandergraaf[at]
Institution: MaxPo, Sciences Po, Paris, France
Time: Start of PhD in October 2013, defence in 2018
Supervisor: Pierre Francois (CNRS, CSO, Sciences Po)

The financial crisis of 2007 and 2008 showed the direct impact financial actors can have on our societies, especially when things go wrong. Behind the crisis were financial actors who accepted, or misunderstood, the risks the different transactions brought with them. Large financial organisations stood in the middle of all of this. At the same time, the way they construct and use financial market risks has been left outside the academic realm. Based on an ethnography, including a participant observation in banking and one in insurance, this thesis helps understand the workings of risk management in these large financial organisations.

Financial theory but also economic sociology take the idea for granted that risks are a rational expectation of future changes. With that, economic theory and the EU's financial regulation have branded risks as profit taking's boundary. The ethnographic data shows otherwise. Financial organisations have namely created a division of labour based on this distinction between risk and profit. Just as other division of labour, it holds an unequal distribution of resources. Risk managers do not have the legitimacy nor the information or material resources to influence the profit takers. Therefore, they look at another aspect of risk, negative events. They try to prevent negative consequences for the organisation from financial markets.

Taking the factors into account this thesis brings together the social studies of finance with the studies of organisations. The former has studied intensely the knowledge practices and the material aspects of financial markets. However, it has left behind the interactions within and between organisations. On the other hand, the studies of organisations have lacked a focus on the local interactions behind organisational representations. By going into the creation and usage of risk assessments, I show how the knowledge about the organisation is created.

The thesis shows how financial organisations survive. They do not do so because of a risk control of possible and existing investments. They can survive because risk managers fend of powerful actors that might harm the organisation. Regulatory bodies could bring trouble but so could shareholders, external accountants or fellow financial organisations. The risk managers create a form of knowledge that they believe outsiders accept. They try to remain within professional and sectoral standards. However, that frame is relatively flexible, especially under pressure. The final representation towards the resourceful outsiders has priority.