Report on the role of financial regulation in the provision of security

The report examines the financial system as critical infrastructure, distinguishing between 'financial securitisation' (making securities liquid and credible) and 'political securitisation' (surveillance to combat terrorism and money laundering). It maps global financial flows and actors, then details the tools used to maintain stability, such as Basel III capital requirements, deposit insurance, and the role of central banks as lenders of last resort. A significant portion of the analysis focuses on the 'finance-security assemblage,' where IMF macroeconomic monitoring converges with FATF's anti-money laundering and counter-terrorist financing (AML/CFT) regimes. The authors argue that this convergence has led to 'de-risking,' where banks exclude 'suspect communities' and high-risk jurisdictions based on private-sector risk-profiling databases like World-Check, potentially creating barriers to financial inclusion and exacerbating global instability.

• The financial system is a unique form of critical infrastructure because its primary operational principle is risk-taking, meaning that 'what circulates in contemporary financial circulation is, to a large extent, risk itself.'
• Financial securitisation is defined technically as turning assets with predictable cash flows into marketable securities, but more generally as the process of 'the becoming liquid, becoming credible, becoming plausible of debt securities'.
• The global financial landscape is characterized by significant imbalances, with Eastern Asian countries, oil/gas producers, and export-oriented European nations exporting capital, while Anglo-Saxon and Southern European economies (until 2012) have been primary importers.
• Shadow banking, which involves credit intermediation outside conventional banking, represents one fourth of total financial intermediation worldwide and about half of total banking system assets.
• Post-crisis financial regulation has shifted toward a macro-prudential paradigm focusing on systemic risk and 'cascading failures in a network of interconnected system components' rather than just individual institutional health.
• The Financial Action Task Force (FATF) enforces a global surveillance regime that requires states to criminalize money laundering and terrorist financing, often using broad definitions that include the financing of individuals 'even in the absence of a link to a specific terrorist act or acts'.
• The convergence of financial and political surveillance has created a 'finance-security assemblage' where the IMF's stability goals and the FATF's integrity goals merge, making compliance ratings a benchmark for a country's safety for trade and investment.
• The burden of FATF compliance has led to 'de-risking,' where banks terminate relationships with customers or entire countries to avoid the risk of due diligence failure, often based on 'crude ethnic profiling'.
• Private-sector databases, specifically World-Check, have acquired quasi-governmental power by constructing a worldwide 'suspect community' based on open-source data, allegations, and hearsay, which banks use to deny financial services.
• The report concludes that the current regime of risk profiling and exclusion may be counterproductive, as the exclusion of underdeveloped countries from the global economy 'could even exacerbate the conditions that fuel terrorism and crime in the first place.'

APA

Boy, N., Larreina, M., Hayes, B., Kreissl, R., & Nagel, J. (2015). Report on the role of financial regulation in the provision of security. Peace Research Institute Oslo. https://cdn.cloud.prio.org/files/9a2cfb3b-ea4b-495a-8e11-0ce2dfc268a9/D52 Report on Financial Regulation.pdf?inline=true

Chicago

Boy, Nina, Mikel Larreina, Ben Hayes, Reinhard Kreissl, and Julius Nagel. Report on the role of financial regulation in the provision of security. Peace Research Institute Oslo, 2015. https://cdn.cloud.prio.org/files/9a2cfb3b-ea4b-495a-8e11-0ce2dfc268a9/D52 Report on Financial Regulation.pdf?inline=true.

Wikipedia

{{cite report |last1=Boy |first1=Nina |last2=Larreina |first2=Mikel |last3=Hayes |first3=Ben |last4=Kreissl |first4=Reinhard |last5=Nagel |first5=Julius |title=Report on the role of financial regulation in the provision of security |publisher=Peace Research Institute Oslo |date=31 August 2015 |url=https://cdn.cloud.prio.org/files/9a2cfb3b-ea4b-495a-8e11-0ce2dfc268a9/D52 Report on Financial Regulation.pdf?inline=true |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{boy2015report, author = {Boy, Nina and Larreina, Mikel and Hayes, Ben and Kreissl, Reinhard and Nagel, Julius}, title = {{Report on the role of financial regulation in the provision of security}}, institution = {Peace Research Institute Oslo}, year = {2015}, month = aug, url = {https://cdn.cloud.prio.org/files/9a2cfb3b-ea4b-495a-8e11-0ce2dfc268a9/D52 Report on Financial Regulation.pdf?inline=true}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }