The global governance of systemic risk: How measurement practices tame macroprudential politics

Matthias Kranke, David Yarrow

Research output: Contribution to journalArticlepeer-review

Abstract / Description of output

This article explores how systemic risk has been governed at the international level after the financial crisis. While macroprudential ideas have been widely embraced, the policy instruments used to implement them have typically revolved more narrowly around the monitoring of risk posed by discrete ‘systemically important’ entities. This operational focus on individual entities sidelines the more radical implications of macroprudential theory regarding fallacies of composition, fundamental uncertainty and the public control of finance. We explain this tension using a performative understanding of risk as a socio-technical construction, and illustrate its underlying dynamics through case studies of systemic risk governance at the Financial Stability Board (FSB) and the International Monetary Fund (IMF or Fund). Drawing on official reports, consultation documents and archival sources, we argue that the FSB’s and IMF’s translations of systemic risk into a measurable and attributable object have undermined the transformative potential of the macroprudential agenda. The two cases illustrate how practices of quantification can make systemic risk seemingly more governable but ultimately more elusive.
Original languageEnglish
Pages (from-to)816-832
JournalNew Political Economy
Volume24
Issue number6
Early online date12 Dec 2018
DOIs
Publication statusPublished - 2019

Keywords / Materials (for Non-textual outputs)

  • Financial Stability Board
  • global governance
  • International Monetary Fund
  • macroprudential regulation
  • quanitification
  • systemic risk

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