Close Range: Targeting Regulatory Reform

Abstract

Since the onset of the financial crisis, regulatory reform has held a central place on the political and academic agenda. An intense and broad discussion about a “New Financial Architecture” belies the idea that finance is “too complex” to become the subject of public debate. An abundance of statements have been made to underline that a new regulatory era is beginning. It is not surprising in this context that the G20 economic summit on November 15, 2008 was presented as a “Bretton Woods II” or that Nicolas Sarkozy arrived to the meeting declaring that “the all powerful market that is always right is finished” (Augar 2009). However, there are surprisingly few radical changes or radical breaks with the past. The main outcome of the G20-summit was the reincarnation of the “financial stability forum” as a “financial stability board.” As the Economist reassured its audience: “fortunately, the G20's attitude to global finance seems realistic. The communique was not a grand manifesto but a pragmatic acknowledgement of the tension between a globalising capital market and national regulation.” This contribution reflects on the widely agreed upon need for radical reforms and their absence. It suggests that to understand this situation, it is useful first to consider reformers’ taken-for-granted understandings of reform—the reform doxa —as well as their reform practices that together produce a “close range” of reform options. The “sociological approach” inspiring this short argument is the “reflexive sociology” of Bourdieu and the many scholars who written on the economy working in this tradition. 5 The close range of financial reform process is intrinsically tied to its anchoring in reformers’ shared understanding of financial markets; a doxa that shapes the regulatory discussion among financial regulators. Although there is plenty of room for critique and even if the doxa may evolve in time, it …