The Social Licence for Financial Markets

This book is about what Mark Carney has called ‘the social licence for financial markets’ and how it can point us towards a more sustainable future. Author David Rouch argues that what it reveals contrasts sharply with the usual portrayals of markets as places of unrestrained financial self-interest. Drawing attention to a more complex reality and the presence of justice-focused aspirations in finance can positively impact individual, institutional, and systemic behaviour: change, not imposed by regulators, but emerging from the very substance of market relationships. 

The finance sector should have a key role in addressing humanity’s increasingly pressing sustainability challenges. Yet the relationship between finance and society has not recovered from the 2008 crisis and the scandals and austerity that followed. The Covid-19 pandemic and its economic fallout is sharpening some of the issues and creating new ones. Recognising that financial markets operate subject to a social licence has the potential to galvanise market participants in tackling these challenges, strengthening social solidarity on which markets also depend, and to provide coordinates for navigating a way through the post-pandemic social, political and economic landscape.   

“This book is an important contribution to that debate that deserves to be widely read.” (Bruce Davis, Financial World, November 2020-January 2021)

“All of us, the firms in the financial sector, their regulators and their advisers are responsible for building and maintaining the social capital that markets need to thrive. This book will prove an invaluable read to financial actors, academics, and politicians and to anyone else seeking to understand how to focus finance for good. Through this book, David gives us all a call to action, and we must answer it and give it the attention it deserves.”

—Mark Carney, from the Foreword

“Increasing focus on Purpose, and on Environmental, Social and Governance issues within organisations is necessary and very welcome. But if the business world is to be sustainable, operating within a coherent society, additional system-wide changes also need to be considered. David offers a valuable and compelling framework for navigating just these challenges.”

—Edward Braham, Senior Partner, Freshfields Bruckhaus Deringer

“David Rouch shows that public trust in finance cannot be established by laws and regulations alone. His call for a social licence for finance should inspire a much-needed public debate about the role of finance in a just society.”

—Michael J. Sandel, author of What Money Can’t Buy: The Moral Limits of Markets

“David’s concept of ‘social licence’ is a powerful and provocative way to frame the new zeitgeist of finance and his book offers a punchy and rousing call to arms. With a lawyer’s precision, he includes handy summaries and speed-reads of the key points, backed up with a lucid narrative that explains the central arguments. It should be required reading for today's new generation of financiers and lawyers, particularly those who hope to create a more sustainable and politically acceptable form of 21st century finance.”

—Gillian Tett, Chair, FT editorial board and editor-at-large, US

David Rouch, an international financial services regulatory lawyer, became a partner in Freshfields Bruckhaus Deringer in 2004. He has advised the full range of financial market participants, dealing with some of the market’s most prominent regulatory bodies. He is particularly known for his work on law and finance culture. He has run two joint projects between Freshfields and the London School of Economics exploring this area and has also participated in the work of the Law and Ethics in Finance Project. He is currently leading an international team advising a group including the United Nations Environment Programme on sustainability impact in the investment process.