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Abstract

‘Financialization’ refers to a variety of processes characterized by the increased prevalence of financial actors and logics in contemporary capitalist societies. Borrowing from Mills, I suggest that financialization may fruitfully be understood as the institutionalization of a financial vocabulary of motive. Mills argues that the type of reasons we give and the type of reasons we accept as legitimate varies, dependent on the social setting. The financial vocabulary of motive requires actors to motivate their actions by analogical extension of key concepts, ideas and paradigmatic problem solutions from modern finance theory. Analysing documents and 44 oral history interviews, I study the implementation of Solvency II—a European regulatory framework for insurance capital that transforms how insurers evaluate their assets and liabilities. To prevent the immediate failure of insurers’ traditional business models, insurers had to re-articulate past practices in the language of financial risk management.