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Legitimacy and status groups in financial markets
Author(s) -
Preda Alex
Publication year - 2005
Publication title -
the british journal of sociology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.826
H-Index - 92
eISSN - 1468-4446
pISSN - 0007-1315
DOI - 10.1111/j.1468-4446.2005.00077.x
Subject(s) - honour , legitimacy , intermediary , reputation , financial market , financial intermediary , collective action , business , financial services , control (management) , finance , economics , financial system , sociology , political science , social science , law , politics , management
Economic sociologists have argued that financial markets should be analysed as uncertainty‐processing social networks and intermediary groups. Networks and intermediaries alone cannot confer legitimacy upon financial actors and transactions. Status groups are a solution to this problem. They emphasize reputation, honour and good social behaviour as stabilizers of collective action, as means of social control and as indicators of legitimacy. I examine here the emergence and evolution of status groups of brokers in London, New York and Paris, and show how emphasis on honour was used to legitimize financial transactions. I argue that financial markets should be conceived as networks, intermediary and status groups. In global, automated financial markets status groups like securities analysts are gaining in prominence.