Seeing and Being Seen: How Stress Testing Banks Puts the State Itself on Trial

• In Event: Scenarios Beyond Imagination: What Is Imaginable? and What Is Not?

Abstract

As an anticipatory device to inspire trust among global market participants in the banking system’s resilience (Collier/Lakoff 2015), stress tests need to be hypothetical, yet realistic, catastrophic, but not worst-case. Successfully calibrating this hypothetical realism hinges upon regulators’ ability to know, respond to, and influence their audiences’ expectations and the latter’s willingness to grant that ability (Beckert 2016; Wansleben 2018). Based on an analysis of policy documents, congressional hearings, speeches, and reflections by actors, this paper traces in detail how the 2009 Supervisory Capital Assessment Program (SCAP), subjecting the 19 largest US banks to a stress test, was assembled as a public intervention (Latour/Weibel 2005; Eyal/Buchholz 2010). Focusing on the controversies among policymakers concerning the degree of transparency necessary to be legible, I argue that this “regulatory drama” (Vollmer 2007) subjects not only the banks to a test but also puts the state on trial: only if its agents are considered competent and neutral actors adhering to norms of transparency and accountability (Fourcade 2017; Krippner 2007), their audiences will consider their intervention to be ‘credible’ and act accordingly. Hence, for seeing like a state to be consequential at all, states also need to be seen in a certain way. Joining in recent attempts to integrate STS and Political Economy approaches more thoroughly (Braun 2015, 2016), this paper thus contributes to the study of legitimacy in the age of a globalized finance and how state agents navigate the demands by the different constituencies of contemporary capitalist democracies (Streeck 2017).

Author

• Julian Jürgenmeyer