Title

Derivatives Traders Do What, Again? (Book Review)

Document Type

Book Review

Publication Date

2012

Abstract

Critics of financial regulation sing a classic refrain, associated with Friedrich Hayek’s theories: Regulation cannot match the temporality of capitalism, as it is based on analysis of what has already transpired in markets that are perpetually evolving. In Collateral Knowledge, Annelise Riles disrupts the Hayekian critique of financial regulation. She presents collateral in derivatives markets as a technique and an aesthetic practice and then contends that state actors also can deploy private actors’ techniques in response to the temporal nature of markets. There is nothing inherently private about the methods of self-governance that private actors use to accommodate temporality. This review (i) describes Riles’s conception of swap collateral, and (ii) offers a framework for vetting her contentions about financial regulation, using examples of legal techniques from the securitization context.

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