Underwater: An ethnographic account of the relationship between bank and business owner in the aftermath of interest rate derivative sales

Abstract

In the late 2000’s banks sold interest rate derivatives to Small and Medium-sized Enterprises (SMEs), which decreased their value after the financial crisis of 2007/2008. This increased the debts of more than 19,000 business owners, rendering business owners in financial trouble or bankruptcy. This thesis seeks to understand the unfolding relationship between bank and business owner through these events. Ethnographic research methods are used to gain understanding of how banks, operating from a global financial system, impact the social realities of local businesses. The social conflict and its dynamics are understood through in-depth interviews with (former) bankers, business owners and financial experts and participative observation during a court case and an interest group meeting. To interpret the gathered information, theories of Giddens structuration theory, Ho’s concept of liquid culture and Appadurai’s analysis of derivatives are used. This thesis shows that when interests conflict, the banks short-term profit interests will dominate over the long-term benefits of a stable customer relation. Furthermore, it describes the road of money, towards deepening levels of abstraction and the creation of a black box that hinders the understanding of all the actors involved. With finance becoming a world that revolves around itself, I argue to look for alternatives that ground finance in realities that are easier to comprehend.