Shape-shifters, chameleons, and recognitional politics:the asset management industry and financial regulation

The asset management industry is becoming a systemic feature of global finance, yet has evaded regulators’ efforts to designate its largest firms as systemically important institutions. How has this been achieved? We use as our example BlackRock’s running commentary on the evolving plans of both prudential (banking) and securities (market) regulators in the period from 2008 to 2018. We show how asset managers engaged in successful recognitional politics, based on a decade-long struggle to influence how they were seen across the regulatory divide. James C. Scott’s most recent thoughts on legibility codes provide us with our conceptual language of shape-shifters and chameleons. Two distinct strategies were simultaneously in play. As a shape-shifter, BlackRock repeatedly changed form in its self-presentation to prudential regulators concerned with systemic risk, so they could not be certain what they were looking at. As a chameleon, it invited securities regulators to maintain their authority over the asset management industry, so it could increasingly blend into the supposedly safe category of market-based finance.