Law, governance, and finance: introduction to the Theory and Society special issue

After decades of deregulation and innovation, contemporary financial markets remain firmly anchored in law and legal institutions. The idea that private financial actors simply want to escape government oversight and regulation is simplistic as private interests find the coercive powers of the state too useful to forgo. Instead, such actors engage law selectively to create a more certain environment for themselves and their profit-seeking activities. Contract law adds certainty to financial transactions; law shapes how financial actors use information and exploit information technology; law constitutes financial values; and law allows financial institutions to be turned into assets. Law's application is shaped by changing conceptions of risk, as well as by new business models for financial institutions.