On June 28-30, the Society for the Advancement of Socio-Economics held its annual meeting at the Sloan Business School of the MIT, in Boston. The event gathered several hundred of contributors from all over the world. It was a fantastic concentration of researchers coming from the fields of political science, economics, sociology, anthropology and history, and attempting to grasp economic processes in an interdisciplinary dialogue.

My contribution had to do with the notion of “risk free” interest rate (Session on “The Concept of Prudence in Economic Life and Regulation”, organized by Sabine Montagne and Yuri Biondi). This notion is overwhelmingly assumed in financial formulas, but is being explicitly challenged by the IMF and the BIS, as they grapple with sovereign debt crisis in Europe and take into account the impact this has in financial regulation. After the collapse of AAA rated ABS and CDOs, the assumption that AAA rated notes are “risk free” is understandably questioned. This remark may seem historically obvious, but it undermines the concept of there being something “risk free”, in a way that still needs to be explored by regulators and the financial industry. This also challenges the idea that rich states will always pay their debts and be able to bail out financial institutions, i.e. it redefines what is understood by “sovereignty”, in financial matters, but also probably beyond them.