HOW CREDIT INSTITUTIONS LOOK AT SOCIETY

ABSTRACT

Twenty years ago, Anthony Giddens proclaimed that modernity was, inherently, deeply and intrinsically sociological in the sense that sociological knowledge tended to be rapidly assimilated by individuals and institutions and therefore incorporated into subsequent processes of change. Thus, it may seem relevant to question just how much sociology is actually being put into practice in economic institutions in general and in credit institutions in particular. Drawing on fieldwork conducted in the marketing, risk, and financial departments of two Portuguese retail banks, this article describes how these institutions use specific views of society which are predominantly statistical and bear little resemblance to more qualitative sociological or anthropological accounts. Hence, there is a clear need to reconsider the problem of social reflexivity and to grasp to what extent the social sciences are still important in providing a framework for perceiving the economy and society.

Keywords:

• retail banking
• sociology
• economics
• reflexivity
• performativity
• Portugal

Acknowledgements

A shorter version of this paper was orally presented during the 9th Conference of the European Sociological Association (Lisbon, 2–5 September 2009). The present version was revised by Kevin Rose, to whom the authors are obliged. We would also like to thank the editors of European Societies and one anonymous reviewer for their helpful comments on the original manuscript.

Notes

¹With the exception of two smaller institutions, BPP and BPN (the former an investment bank), the credit crunch of 2008 only caused a moderate and transitory reduction in Portuguese retail bank profitability.

²In this regard, we do not follow completely the Callon et al.'s (2002: 200–1) assumption that the interactions between supply and demand, involving reciprocal and complex influences, form the central nexus assisting in the qualification of goods. This may clearly be true in specific market sectors where an effective ‘economy of qualities’ is evolving. We doubt, however, that this dialogical principle exists at all in some other business sectors and we consider that any social scientist studying the marketplace should also be prepared to acknowledge the preponderance of supply interests over demand preferences (see Knights et al. 1994; Williams 2004 for concrete examples of this preponderance in the financial industry).

³This periodical rotation of functions may also be considered a rule inspired by sociological concerns in the sense it is based upon the perception that workers tend to develop a specific kind of awareness when induced to adapt to new situations while becoming more passive and accommodating when remaining in the same environment. The rotation principle was more evident in Bank B than in Bank A, at least during the fieldwork period, and is also fostered by the intense churn in banking sector employees. The conditions and effects of such staff rotation on organizational practices have been debated by some ethnomethodological approaches (see Rawls 2008: 714 and 724, for some general insights) but this is a discussion that must be left for another occasion.

⁴Some of them quite independent of the customer's own will, such as the possibility of having her salary deposited directly in the bank by the customer's employer.

⁵In the UK, this quantitative turn in the retail banking industry brought about a centralization of services and a decline in regional and local offices (something that did not at all happen in Portugal where the progressive centralization and quantification in the late 1990s and 2000s has been paralleled by an expansion in the branch network).

⁶The effort rate (in Portuguese ‘taxa de esforço’) is an indicator intended to measure the ability of a client to pay the instalment, taking household income as the main term of comparison. Ideally, the payment amount should be below 50 percent of total household income.

⁷Indeed, the recent formulation of an ‘economy of words’, proposed by Holmes (2009) to describe central bank communicative behaviours, hardly distinguishes itself from Merton's founding principles, which are explicitly mentioned in an email transcript by one of Holmes’ interlocutors, a senior economist in the Reserve Bank of New Zealand (ibid.: 407). The importance of storytelling as a way of framing and propelling economic events has also been explored in another classic paper by Hirsch (1986), a propos the advent and generalization of hostile takeovers among US companies.

⁸We would like to thank an anonymous peer reviewer for having pointed out this fact to us.