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    Reckless prudence: Financialization in UK pension scheme governance after the crisis

    Mabbett, Deborah (2020) Reckless prudence: Financialization in UK pension scheme governance after the crisis. Review of International Political Economy , ISSN 0969-2290. (In Press)

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    Abstract

    In pensions, the practice of valuation purports to answer the question of whether a pension fund has sufficient assets to honor its promises. Uncertainty about the answer is converted into calculable risk, using the insights of financial economics. This paper examines why UK pension funds have ‘derisked’ their portfolios by moving out of assets with volatile prices. It is shown that derisking is produced by the performance of financialized risk management in a regulatory setting where horizons are shortened. While derisking is not generally in the interests of employers or scheme members, and is damaging to the wider economy, three features of the governance structure have stymied attempts to counteract it. These are: the spillover effects of financialization in corporate accounting, herding around industry benchmarks, and collective action problems arising from the regulator’s dependence on dialogue with private actors and from the risk-aversion of political actors.

    Metadata

    Item Type: Article
    Additional Information: This is an Accepted Manuscript of an article published by Taylor & Francis, available online at the link above.
    Keyword(s) / Subject(s): pensions, financialization, performativity, derisking, valuation, depoliticization
    School: Birkbeck Schools and Departments > School of Social Sciences, History and Philosophy > Politics
    Depositing User: Deborah Mabbett
    Date Deposited: 16 Apr 2020 09:52
    Last Modified: 21 Jul 2020 01:31
    URI: http://eprints.bbk.ac.uk/id/eprint/31647

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