The set of regulations that govern global financial markets are complex and ever-evolving, and they have far-reaching consequences for global development and prosperity.
But while political discussions may take on the broader principles behind regulations, according to law professor and author Annelise Riles, it's often the technicalities -- the legal thought behind the procedures and policies -- that matter most.
Riles, the Jack G. Clarke Professor of Far East Legal Studies, professor of anthropology and director of the Clarke Program in East Asian Law and Culture, spoke about her new book, "Collateral Knowledge: Legal Reasoning in the Global Financial Markets" (University of Chicago Press), in a panel discussion celebrating its publication in Myron Taylor Hall's Moot Court Room April 27.
The book traces the use of collateral, which Riles calls "the most paradigmatic private regulatory device," to study how public and private regulations interact in markets around the world.
Riles uses "collateral" as a play on words, said panelist Tom Baker, law professor and deputy dean at the University of Pennsylvania.
"The book reflects two different ideas of collateral," Baker said. In the financial regulatory world, collateral is a private technique to secure a transaction. But the term also means "to the side" or "indirect."
"And this knowledge is a little to the side -- not direct," he said. "And a lot of the way lawyers interact with the law is a little to the side."
The book is unique in its ethnographic approach, Baker said.
"Ethnography involves entering the world of the participants. We get a sense of knowing the people she interviewed," he said. "She really got the real deal, because she got in."
Collateral may seem mundane, Riles writes, but its centrality in both public and private law makes it a key element in any form of financial regulation. And ultimately, she argues, markets are shaped by the cumulative effect of such small-but-ubiquitous elements -- rather than by broad, top-down regulations.
"One of the big surprises of this project was learning to pay attention to what lawyers actually do -- the details of what they do ... the craft that they may not make a big deal of themselves," Riles said. "All that stuff that got lost as technical gobbledygook."
She found that the details do much more than meets the eye. And as the world looks more closely at regulatory reform, examining the role of technicalities and legal technique -- and engaging the public in that examination -- is more important than ever.
Anthropological study can offer unique insight into the process, Riles noted. But anthropologists and financial regulators rarely mingle, so striking a balance that would interest both audiences was a challenge.
"My true dream for this project would be if each of those audiences got just a little bit more interested in each other," she said. "If the people at [the Department of] Treasury were to say, 'The legal code -- that's not so scary.' And if the anthropologists were to say, 'You know, technical lawyers are pretty damn cool sometimes.'"