The financial Logos: The framing of financial decision-making by mathematical modelling

• I introduce the notion of “financial Logos”.The financial Logos is a structuring discourse embedded in technical and mental tools of financial devices and practices.This discourse contains a specific representation of risk, modelled by mathematical measures.The mathematical modelling frames financial decision-making.
• I use the notion of “performativity” to describe the concrete action of the financial Logos.The performativity of the financial theory means that the financial real world is provoked by the financial Logos.The enactement of financier professionals follows the Logos roles.The “performance” of a financier professional is a theatrical performance.
• I draw consequences from this analysis for ethics of finance.The financial ethics needs to move to a postpositivistic stage.The business ethics has to be completed with epistemic ethics.

This paper introduces the notion of “financial Logos”, defined as a structuring discourse embedded in management tools and beliefs of financial practices. I hypothesize that this discourse contains a specific representation of risk mathematically modelled by probability measures. Next I use a performativity based approach to describe the concrete action of the financial Logos on financial practices: the framing of financial decision-making by mathematical modelling. I argue that it is not possible to think of a given financial practice without epistemologically and sociologically thinking of the contribution of the mathematical modelling to this practice. I conclude with consequences for ethics of finance: extending ethics of action to epistemic ethics, I suggest that, in finance, any preference in mathematical modelling is also a preference in ethics.

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