Research Output
Exploring justifications of “The Social Contract” between the banking sector, financial regulators, and NGOs
  The banking sector is important to the UK, employing 1.2% of the workforce whilst contributing 5.5% of tax receipts; indeed, the credit creation role of banks is essential in modern economies. Banks caused the financial crisis of 2007/8 and subsequently the sector was beset by scandals, leading to calls for “a new social contract” between the banks and society (Tucker, 2009).

The aim of this study is to explore public justifications of “The Social Contract” by the Banking Sector, Financial Regulators, and NGOs (the latter as representatives of “civil society”). Social contracts may be represented by “public justifications”, the constructs of which are analysable using an empirical framework: “orders of worth” express a particular paradigm toward justice and the “common good”. The orders of worth or “polities” - Market, Industrial, Civic, Domestic, Inspired, Reputation, Projective, and Green, are all characterised by dimensions such as investment criteria, qualified objects, qualified subjects, and inequalities of status relations.

A qualitative content analysis approach is used to analyse texts such as speeches and annual reports for the presence or absence of, and compromises between, the polities. As the first study of its type in banking and finance, the findings have implications for regulators, who should be aware of the newly identified “instrumental” compromise constructed by banks in their approach to regulation. Regulators should also be aware of the increased risk of moral hazard arising from their own market-oriented justifications of the social contract. A further contribution to the banking and finance literature is to problematise the limited use of ecological justifications in banks’ and regulators’ constructs of the social contract.

Banks often focus on shareholders in their public justifications, demonstrating a gap between theory and practice in the pragmatic sociology literature: the normative exclusion of investors as qualified subjects is problematic given the important position shareholders hold in banks’ construction of their roles and responsibilities. Further, development of the market polity is proposed to better cater for banks’ “credence services” and long-term client relationships.

  • Type:


  • Date:

    01 July 2020

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  • Funders:

    Edinburgh Napier Funded


Langford, P. Exploring justifications of “The Social Contract” between the banking sector, financial regulators, and NGOs. (Thesis). Edinburgh Napier University. Retrieved from



banks; social contract; banking sector; financial regulators; NGOs

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