Authors: Albina Gibadullina*, University of British Columbia
Topics: Economic Geography, Political Geography, Legal Geography
Keywords: resilience, governance, financial stability, financial crisis, complexity science
Session Type: Paper
Start / End Time: 8:00 AM / 9:40 AM
Room: 8217, Park Tower Suites, Marriott, Lobby Level
Presentation File: No File Uploaded
This paper examines how, in the aftermath of the global financial crisis, the management of systemic risk within the global financial system saw the emergence of a new ontology governing its operation, grounded in the science of complex adaptive systems. The origins of complexity science can be found in the works of ecologist Crawford Holling (1973) who sought to understand how an ecosystem can remain cohesive despite various destabilizing forces, exogenous or endogenous, so as to shift away from linear equilibrium-based models and towards conceptualizing system-level resilience as a multidimensional process that ensures the reproduction of relationships within a system. Despite its ecological origins, the underlying concepts pertaining to the management of complex ecosystems (tipping points, networks, contagion, interdependency) are increasingly being adopted by the leading central banks, think-tanks, and financial institutions who propose a new mode of resilience-based governance. In this paper, I will examine the trajectory and development of complexity science in financial literature by analyzing reports from the Bank of International Settlements and the Financial Stability Board, with an aim to understand the ideological appeal of this ecological ontology and its deployment in the financial sector. My provisional argument is that viewing global finance through the lens of complex adaptive systems represents a particular “regulation fix” that transfers the power to intervene away from the state while keeping the state responsible for ensuring the stability of the overall system.