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Title: Sensemaking in investor networks : the interactions between financial market participants and the European Central Bank
Author: Wu, Christoph
ISNI:       0000 0004 9359 9453
Awarding Body: University of Cambridge
Current Institution: University of Cambridge
Date of Award: 2020
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Central banks have taken centre stage in financial market discourses over the past decade amid unconventional monetary policy and financial crises. They are increasingly active in financial markets and thereby rely on market participants to help with and amplify the policy transmission. But how do market participants actually interpret and make sense of central banks as market actors? How do central banks interact with and influence behaviour of systemically important market participants and do these, in turn, influence central banks themselves? In this context, are central banks in the position to actually implement and achieve what their policies are set out to do? These are the questions the thesis seeks to answer. The aim of this thesis is to highlight an area that has so far been underemphasised in the social scientific study of central banks, specifically, how active market participants, the main interlocutors of central banks, adjust investment practices, research methodologies and decision-making processes to the unconventional monetary policy of the European Central Bank (ECB). By doing so, the thesis’ focus is on the portfolio managers at systemically important asset management companies as the main protagonists, not the central bank itself. The focus of the research spans the asset purchases under the Public Sector Purchase Program and the Corporate Sector Purchase Program from 2015 – 2018. Utilising a multi-method approach, the thesis incorporates a quantitative holdings-based analysis of the corporate interlocking networks created by the purchase programs, a social network analysis of the ECB’s Bond Market Contact Group, in depth qualitative interviews with senior Portfolio Managers at systemically important asset managers in Europe and Asia and documentary analysis of interviews, statements and reports of the ECB, investment banks and asset managers. The thesis is grounded in and aims to contribute to organisation studies, the social studies of finance and economic sociology, particularly with reference to networks. It shows the ways in which both monetary policy and investment decision-making is shaped by social processes of sensemaking in expert networks, and by highlighting the unintended consequences of policy actions, critically assesses the role of these experts.
Supervisor: Lane, Christel Sponsor: University of Cambridge
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
Keywords: Sensemaking ; Network Analysis ; Qualitative Interviews ; Organization Studies ; Economic Sociology ; Social Studies of Finance ; Portfolio Managers ; Central Banks ; Sociology ; Decision-making ; Asset Management