Introduction: Private Governance, Global Markets, and the Legal Technologies of Collateral

Annelise Riles

in Collateral Knowledge

Published by University of Chicago Press

Published in print May 2011 | ISBN: 9780226719320
Published online February 2013 | e-ISBN: 9780226719344 | DOI:
Introduction: Private Governance, Global Markets, and the Legal Technologies of Collateral

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Global swap markets are seen as economically irrational, financially dangerous, and prone to ethical abuse, another dimension of the same market has emerged as solid, respected, and even morally and ethically empowered. This chapter focuses on an element known as collateral. Collateral survived during a time of major changes in market ideologies with its reputation intact when so much else of what once was unquestionable belief—free markets, self-regulation, the innate brilliance, and rationality of derivatives traders—now seems like a quaint mythology from a strange other world. In the simple technology of collateral, this nexus of paper documents, legal theories, legal experts, clerical staff, computer technologies, statutes, and court decisions are encapsulated by some very grand hopes. As a transplanted legal technology, collateralization is paradigmatic of global private law solutions. Although collateral is rooted in multiple bodies of national law, it is also a device for running an end-game around certain aspects of national law, such as national bankruptcy codes. Global governance has increasingly become private governance—regulation through technical legal devices that take power out of the hands of public entities and put it in the hands of private individuals, corporations, and armies.

Keywords: global swap markets; technology of collateral; national bankruptcy codes; global governance; private governance; ethical abuse; free markets; self-regulation; derivatives traders; collateralization; global private law solutions

Chapter.  11083 words. 

Subjects: Financial Markets

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