Banking risk in the Middle Ages and modern society: A social systems approach to banking risk

Nils Winther Pedersen

Student thesis: Master thesis


Abstract: The concept of risk has today become a ubiquitous concept within the banking sector ranging from financial risk to liquidity risk and reputational risk. The concept of risk saturates the entire banking sector but leaves an ambiguity about what the concept really means behind. The ambiguity concerns how the concept of risk, on the one hand, involves reining the uncertainty of the future as best as possible while, on the other hand, involves profitable and high-yielding possibilities. The focus of this thesis is to explore and understand the concept of risk in the banking sector in order to grasp the meaning of the concept and discern the particular emphasis on the concept in the banking sector. Through the use of systems theory, the thesis investigates the origination and development of risk in the banking sector in the Middle ages and in modern society. The thesis investigates how risk is handled in the social communication of the two periods and analyses how the concept of risk performs a function in banking communication in periods of a new and changing environment of economic activities. The argument brought forward is that the concept of risk in the banking sector embeds a particular economic meaningfulness about how to handle the future. In the modern banking sector, decisions about the future are decided against the background of complex economic contingency and, at the same time, on a confidence in the ability of probabilistic techniques to uncover the reduction of risk. Thus, the current emphasis on risk in the banking sector concerns not so much whether there is more banking risk today than in previous times but more that the banking sector today increasingly communicates about the future and thus risk.

EducationsMSc in International Business and Politics, (Graduate Programme) Final Thesis
Publication date2014
Number of pages102