Fixed Expectations vs Flexible Adaptation? Debt and Resilience As Clashing Security Technologies in Finance

When: 26 Oct 2020, 14:15-15:30
Where: Zoom
Speaker: Nina Boy

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Meeting ID: 971 3362 9050
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Since the turn of the millennium, security has not only become more prevalent in finance, but done so in a two-fold way that entails an increasing conflict of security technologies. On the one hand, the rise of the shadow banking system was premised on the pledge of collateral, leading the current form of the financial system to be described as ‘collateral-based finance’ (Cœuré, 2016, Gabor 2016, Mehrling, 2011). On the other hand, the two seminal events of the 21st century in terms of security governance – the 9/11 terrorist attacks and the 2008 global financial crisis – have produced a new security paradigm of preparedness and resilience that produces a common methodology of crisis management across different systems. If collateral relies on fixed expectations generated through credible commitment, the answer to the crisis-prone nature of globalised interdependent systems offered by the paradigm of resilience requires a security strategy of constant readiness and flexible response, or liquidity. While both collateral and resilience entail the securing of an uncertain future, the manner in which this is done is radically different. Pushed to its most extreme conclusions, the security paradigm demanded by the global interconnectivity between financial system, climate change, public health and political risk may question the very suitability of debt as an instrument to govern financial, political and societal futures.