Authors: Dora-Olivia Vicol*, Queen Mary University of London
Topics: Political Geography, Business Geography
Keywords: Remittances, finance, risk
Session Type: Paper
Start / End Time: 1:10 PM / 2:50 PM
Room: Chairman's Boardroom, Omni, East
Presentation File: No File Uploaded
In 2103, a leading UK bank shut the accounts of 250 small and medium sized money transfer businesses (SM-MTBs). Known as ‘de-risking’ and replicated across the banking sector, this operation saw the off-boarding of hundreds of businesses which were pushed into liquidation, becoming agents, or appealing to tactics which straddled the borders of legality. To SM-MTBs, this was an indiscriminate act of financial exclusion. To the banking sector, it was an attempt at instituting a culture of compliance, in response to stricter Anti-Money Laundering (AML) and Terror Financing (TF) controls. To geographers, de-risking provides an insight into the contradictory political and commercial imperatives which characterise financial regulation.
Drawing upon ongoing research with SM-MTBs, this paper investigates the governance of finance through risk. Starting with an overview of AML and TF legislation we show how risk was valued for its ability to nuance rule, by requiring firms to assess, monitor, and mitigate their particular vulnerabilities. Far from instituting a neutral capillary network of surveillance however, we show how this devolution of regulation also opens spaces of opaqueness, arbitrariness, and unquestioned exclusion. Looking at SM-MTBs’ account closures, we reveal how risk can be deployed to off-board what is, in fact, not a high danger but a low-value sector, in ways which erode small firms’ trust, prompt recourse to informality, and create market dynamics that run counter to the spirit of regulation. We call thus for a geography of finance which unpacks the tensions between political and commercial imperatives of regulation.