Conference Agenda

RN09_04: Money, Finance and Society II
Wednesday, 21/Aug/2019:
6:00pm - 7:30pm

Session Chair: Marta Olcoń-Kubicka, Institute of Philosophy and Sociology at the Polish Academy of Sciences
Location: BS.3.16
Manchester Metropolitan University Building: Business School, Third Floor, North Atrium Oxford Road


Money Knowledge or Money Myths? Results Of A Population Survey On Money And The Monetary Order

Klaus Kraemer, Luka Jakelja, Florian Brugger, Sebastian Nessel

Department of Sociology, University of Graz, Austria

People are using money in everyday life in ubiquitous ways. And they know that money has quite multiple meanings in different social contexts, depending on the situation in which it is used. However, what do people know about money, money creation, money backing and the institutional foundations of the monetary order? To close the blatant research gap on people´s knowledge about money and the institutional foundations of the modern monetary system, we carried out a standardized population survey (n = 2000) in Austria in autumn 2017. Firstly, we review literature on the sociology of money with special regard to money knowledge and monetary institutions. We argue that the sociology of money made progress in analysing the usage of money and the institutions, which produce money but neglected an analysis of ordinary people´s knowledge of the monetary order. Secondly, we review a strand of Financial Literacy research which has empirically assessed people´s knowledge about mathematical and financial issues but not about money or monetary institutions. Thirdly, we suggest a definition of money and give an outline of central institutions to understand the monetary order. Fourthly, we explain our methods and data. Fifthly, we present central descriptive, bivariate and multivariate empirical findings of people´s knowledge of money and monetary institutions with regard to socio-demographic and socio-economic factors (gender, age, education, employment status, household income). Finally, we discuss our empirical findings against the backdrop of existing studies. We conclude by arguing that it is money myths and not money knowledge that may explain the widespread usage and acceptance of money in everyday life.

Saving informally: An examination of local “gün” meetings in Turkey

Remziye Gul Aslan

Bogazici University, Turkey

ROSCAs (rotating savings and credit associations) are informal microfinance groups particularly popular among the developing countries. Their popularity is explained as a result of formal institutions’ lack of capacity to meet financial needs in such countries. The popularity of these informal organizations is also explained by their relatively easy entry and exit options, low transaction costs and tax-freeness due to informality and the smallness of their scale.

“Gün” is a type of ROSCA particularly popular among women in Turkey. In güns, a funding pool is formed by the equal contributions of participants in each meeting and the money collected in each round is taken by a participant. This research aims to understand the underlying reasons behind women’s participation in gün groups. This research will present a descriptive analysis of semi-structured interviews conducted with 32 currently participating women and 8 former participant women from three gün groups. During these interviews, I primarily question their motivations for joining a gün group.

Although other studies mainly put emphasis on güns as forced saving mechanisms for low-income households, this research indicates that high-income women also have significant financial motives for participation. Preliminary results also point that women with stronger financial motives than non-financial ones (e.g., socialization, status-marking etc.) are more likely to keep on participating güns for longer durations. Therefore, güns can also be interpreted as a manifestation of the lack of saving culture among women in Turkey besides being an outcome of formal financial institutions’ incapacity.

KEYWORDS: ROSCAs, informality, microfinance, saving culture

Risk Relations Between Financial And State Fields

Markus Lange

Freie Universität Berlin, Germany

Financial industries and states can be considered as strategic action fields (Fligstein/McAdam) that deal with social risks and at the same time contribute to the formation of these risks. Recent economic, legal, and political transformations, e.g. due to the subprime and European debt crisis or Brexit suggest a relational perspective on the construction of risk in these fields: First, although these fields frequently anticipate identical risk events, they rely on different practices to manage these risks. Financial fields tend to generate margins and provide liquidity whereas state fields secure power and enforce collectively binding decisions and regulations. Second, risks also arise due to the substantial economic, fiscal, regulatory, and political interdependencies and entanglements between these fields. States, for example, use regulatory policies to set the rules for finance, but at the same time use financial logics when issuing government bonds to fund expenditures. In contrast, financial actors have to comply with regulatory policies, but at the same time acquire government bonds to either strengthen security in their balance sheets or add risk premiums to generate margins. Conceptualizing these field-inherent practices and cross-field interactions as “relational risk” (Boholm/Corvellec), the paper compares how financial and state actors construct “risk objects” as dangers and “objects at risk” as valuation practices to match their respective field logic. For this, a qualitative study is conducted with 53 interviews and ethnographic fieldwork in the German financial sector, the federal parliament, and federal financial supervisory authorities. It is investigated how risk practices emerge, including forms of self-understanding and other-awareness, and how financial and state actors construct one another as risk objects, whereby each field retains its distinct objects at risk.

Global Financial Regulation: From Risk to Uncertainty?

Trond Loyning

University of South-Eastern Norway, Norway

The question investigated in this paper is to what extent the regulatory reforms after the financial crisis of 2008 entail changes in how risk is perceived and regulated. The efforts undertaken to develop sophisticated regulatory standards in the decades leading up to the financial crisis of 2008 were to an increasing extent based on a “risk-sensitive” approach – regulation was based on the belief in the usefulness of precise measurement of risk taken on by financial actors, and much regulatory efforts were focused on the methodology of doing this. Financial actors and regulators alike had confidence in the institutions supporting such an approach to risk, from the organization of the financial markets in general, to the specific role of rating agencies, and the models used to analyze risk. This belief was shaken during the financial crises, and post-crises regulatory reforms seem to question the earlier approach. The paper discusses the Basel III reforms using the Knightian distinction between (measurable) risk and (un-measurable) uncertainty as a starting point. The final version of the Basel III standards, published in 2018, and debates regarding these standards, are the empirical material. It is argued that while the reforms during the whole period since the financial crises have been characterized by attention to problems of the methodology of measuring risk, it is the final version that most explicitly discusses and take into account these problems. A regulatory consequence is greater reliance on standardized regulations and requirements, applicable to all financial actors.