Why performativity limits credit rating reform

Stellinga, Bart

doi:10.2218/finsoc.v5i1.3016

Cited by 8 publications

(6 citation statements)

References 49 publications

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“…These entangled cognitive processes at the personal level will expand to the extent that they affect the economy as a whole. The study on the combination of herding effect and default risk can also be found in the literature Ma et al (2018), Stellinga (2019), Albu et al (2019).…”

Section: Introductionmentioning

confidence: 94%

The study on risk avoidance of transaction default based on the herding effect

2021

Systems Science & Control Engineering

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There is a widespread phenomenon of trading goods ordered in advance in the commodity market, and consumers choose to imitate others for security reasons, to form a herd phenomenon of following the trend and following the crowd, this has become an important source of default by commodity booking party in transactions, causing a contingent loss to the producer of the goods. In this paper, the influence of the consumer herding effect is introduced into the characterization of default risk transmission, the herding conduction index is added to the intensity-based model of circular default, it makes the description of default risk more in line with the process of outbreak, aggregation and regression of actual risk. With the help of the credit default swap trading mechanism, the cost model of transaction default risk avoidance protocol is given. The simulation results of the model show that the herding effect has an important impact on the default probability of commodity booking party in transactions, it also makes the cost of default risk avoidance have a corresponding direction of change.

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Section: Introductionmentioning

confidence: 94%

The study on risk avoidance of transaction default based on the herding effect

2021

Systems Science & Control Engineering

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“…But this has become less and less the case over the past decades as imbalances have accumulated, the probability of shocks has grown and shock-absorbing capacities have declined. After decades of relative calm, 50 Stellinga and Mügge (2017); Stellinga (2018Stellinga ( , 2019 51 Bonds issued by governments deemed reliable are exceptions. Safe havens in times of crisis, they can rise in value.…”

Section: Systemic Instabilitymentioning

confidence: 99%

An Appraisal of the Financial Monetary System

Stellinga

Hoog

Riel

et al. 2021

Research for Policy

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This chapter assesses the financial monetary system on the basis of four characteristics: (1) its economic contribution; (2) its stability; (3) its fairness in the distribution of benefits, costs and risks; and (4) its legitimacy. Based on this analysis, we highlight key problems in the current system. Our analysis points to two underlying problems: the unbalanced and uncontrolled growth of money and debt; and a distorted balance between public and private interests.

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“…Another way that the concept has been put to work is in understanding the difficulties faced by regulators. In a series of articles addressing post-crisis developments from credit rating reform to macroprudential policies, Stellinga (2019Stellinga ( , 2020Stellinga & Mügge, 2017) argues that while regulators don't think expressly in terms of performativity, they do recognize that markets have reflexive, adaptive, and complex dynamics which militate against attempts at market control. From this perspective, it is not necessary to see regulators as captured or ideologically aligned with financial interests to explain their timidity.…”

Section: Lesson 2: Models Mattermentioning

confidence: 99%

The Routledge Handbook of Critical Finance Studies

Borch¹,

Wosnitzer²

2020

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There has been an increasing interest in financial markets across sociology, history, anthropology, cultural studies, and related disciplines over the past decades, with particular intensity since the 2007-2008 crisis which prompted new analyses of the workings of financial markets and how "scandals of Wall Street" might have huge societal ramifications. The sociologically inclined landscape of finance studies is characterized by different more or less wellestablished homogeneous camps, with more micro-empirical, social studies of finance approaches on the one end of the spectrum and more theoretical, often neo-Marxist approaches, on the other.Yet alternative approaches are also gaining traction, including work that emphasizes the cultural homologies and interconnections with finance as well as work that, more broadly, is both empirically rigorous and theoretically ambitious. Importantly, across these various approaches to finance, a growing body of literature is taking shape which engages finance in a critical manner.The term "critical finance studies" nonetheless remains largely unfocused and undefined. Against this backdrop, the key rationales of The Routledge Handbook of Critical Finance Studies are firstly to provide a coherent notion of this emergent field and secondly to demonstrate its analytical usefulness across a wide range of central aspects of contemporary finance.As such, the volume will offer a comprehensive guide to students and academics on the field of Finance and Critical Finance Studies, Heterodox Economics, Accounting, and related Management disciplines.

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Why performativity limits credit rating reform

Cited by 8 publications

References 49 publications

The study on risk avoidance of transaction default based on the herding effect

The study on risk avoidance of transaction default based on the herding effect

An Appraisal of the Financial Monetary System

The Routledge Handbook of Critical Finance Studies

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