The Volcker Rule: Regulation in an Era of Performativity ,

Affect and Bio-powerJohn Morris

Durham Universityj.h.morris@durham.ac.uk

Outline of the presentation:

1 Foucaultian concepts of governance.

2 Comparison between Volcker Rule and Glass-Steagall.

3 Governing Through Economy

a. Bio-politicsb. Performativityc. An intersection through affective life.d. An Agenda for historians.

1. Logics of governance from the later Foucault:

Sovereign- juridical: A ‘law and command emanating from a ‘geometric centre point.’

Discipline: Camps arranged as to optimise surveillance and correction. The spatiality promoted is one of cellular enclosure of the individual.

Bio-power: An ‘aleatory’ space in which behaviours of populations are facilitated and ‘things are allowed to happen.’ Here we see a spatiality of movement, motion and circulation. (Adapted from Coleman and Grove 2009: 494and Langley, forthcoming : 16).

2. The Volcker Rule and Glass- Steagall

Repackaging and re-circulating risky elements

Structured bonds: a bio-political problem

3.Governing through Economy

1)Inflation Reports.

2)Financial Stability Reports.

3) Libor.

3a. Adapting Bio-politics

Geography:Apparatus of security and affect

Stephen Collier: topological Foucault: recombining and redeploying existing techniques.

Jeffery Nealon : Power and its intensifications.

3b.Speech acts and Performativity:

•J.L. Austin and the active character of our utterences.

• What we do in speaking.

• Marriage vows are more than descriptive.

(a)Austinian performativity:

The economic theory and practices of experts bring about the circumstances they describe

(b) Generic Peformativity:

the physical production and repetition of norms, discourses and practices

3c. Intersection through affective life

Affect: the push of life.

Affective fact: the present experience of an anticipated future.

Financial Stability Reports

Raising the downside risks associated with Credit Derivatives: ‘With structured products which are engineered from instruments that are already leveraged, there are signs that the underlying asset pool may be deteriorating. An abrupt swing in financial market sentiment, or deterioration in the economic climate, could create difficulties for firms and lenders, particularly as they increase their exposure to new and more illiquid financial products’

(FSR 2005(b): 11).

‘ Tail risks’

Managing Traumatic Events (1): Black Monday 1987 Fed, 20th October 1987:

‘the Federal Reserve, consistent with its responsibilities as the nation’s central bank, affirmed today its readiness to serve as a source of liquidity to support the economic and financial system.’

Managing Traumatic Events (2) Subprime Crisis

Performative logic

Bio-political effect

Performativity and Deleuze on affect:

‘an exercise of power shows up as an affect, since force defines itself by its very power to affect other forces (to which it is related) and to be affected by other forces... every field of forces distributes forces according to the relations...spontaneity (corresponding to statements) and receptivity (associated with visibility) now take on a meaning: to affect or be affected ‘(my parentheses)

(Deleuze 1988: 60).

Actions are needed to bolster confidence. Central bank measures to address liquidity problems are an important component (of a response).

Banks can further boost confidence in their resilience through more informative disclosures and by raising capital as a signal of their strength in turbulent market conditions. (Financial Stability Report 2008(a):5 {emphasis added}).

Affect as an object-target for Bank of England and commercial banks.

3d. Where do these techniques have their antecedents?

Sovereignty and performativity?

The logic behind ‘bad banks’ and the Milanese response to plague?