REPORT ON THE THEORY OF RISK AS A SOCIETAL SECURITY INSTRUMENT

The report examines the intersection of financial systems and societal security, arguing that both fields have historically relied on probabilistic risk models but are shifting toward managing 'radical uncertainty'. It details various financial risk models—such as Modern Portfolio Theory, CAPM, and Value at Risk (VaR)—and contrasts them with security methodologies like scenario planning and pre-emption. The author concludes that the 'financialisation of security' and 'securitisation of finance' reflect a broader liberal security problematic of securing circulation in a complex, interdependent world, where societal security is increasingly defined by qualitative resilience and preparedness rather than quantified prediction.

• The report identifies four distinct meanings of 'financial security': as collateral for a loan, as financial instruments (bonds and shares), as the ability to maintain smooth predictable consumption, and as systemic financial stability.
• The 'securitisation of finance' involves state actors framing financial issues as security threats to justify extreme measures, such as policing the financial system to fight terrorist finance or governing the 2007-2010 financial crisis as a crisis of security rather than just economics.
• The 'financialisation of security' is the application of financial logics to security governance, exemplified by the use of algorithmic programmes based on financial derivatives for UK border security and the emulation of financial risk management in the US War on Terror.
• Modern global security is defined by a shift toward 'securing circulation', where the focus is on the flows of people, finance, and information in a complex, interdependent system where small disturbances can cascade into large-scale crises.
• The report argues that while probabilistic risk was central to both finance and security in the late 20th century, there is a shift toward 'non-probabilistic uncertainty', where events are too unpredictable to be quantified.
• Value at Risk (VaR) is a holistic measure of portfolio risk used by financial institutions and regulators, but it is criticized for failing to account for 'tail risk' or 'black swans'—low-probability, high-impact events.
• In security studies, the move toward managing radical uncertainty has led to the adoption of anticipatory techniques such as pre-emption, scenario planning, and threat enactment, which prioritize qualitative preparedness over quantitative prediction.
• Societal security is increasingly framed through the paradigm of resilience, defined as the ability of a society to persist in its essential character—including trust and loyalty—while absorbing extreme perturbations.
• Financialisation has linked the personal financial security of citizens to the volatility of global markets by reconceiving individuals as risk-taking investors whose pensions and mortgages are exposed to market fluctuations.

APA

Boy, N. (2015). REPORT ON THE THEORY OF RISK AS A SOCIETAL SECURITY INSTRUMENT. Peace Research Institute Oslo. https://cdn.cloud.prio.org/files/91c77b2f-b535-447f-9799-dd7681214c30/D51 A report on the theory of risk as a societal security instrument_0.pdf?inline=true

Chicago

Boy, Nina. REPORT ON THE THEORY OF RISK AS A SOCIETAL SECURITY INSTRUMENT. Peace Research Institute Oslo, 2015. https://cdn.cloud.prio.org/files/91c77b2f-b535-447f-9799-dd7681214c30/D51 A report on the theory of risk as a societal security instrument_0.pdf?inline=true.

Wikipedia

{{cite report |last1=Boy |first1=Nina |title=REPORT ON THE THEORY OF RISK AS A SOCIETAL SECURITY INSTRUMENT |publisher=Peace Research Institute Oslo |date=13 March 2015 |url=https://cdn.cloud.prio.org/files/91c77b2f-b535-447f-9799-dd7681214c30/D51 A report on the theory of risk as a societal security instrument_0.pdf?inline=true |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{boy2015report, author = {Boy, Nina}, title = {{REPORT ON THE THEORY OF RISK AS A SOCIETAL SECURITY INSTRUMENT}}, institution = {Peace Research Institute Oslo}, year = {2015}, month = mar, url = {https://cdn.cloud.prio.org/files/91c77b2f-b535-447f-9799-dd7681214c30/D51 A report on the theory of risk as a societal security instrument_0.pdf?inline=true}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }