Default Invariance: Naïve Category of Law and Finance

Default invariance is the idea that default does not change at any scale of law and finance. Default is a conserved quantity in a universe where fundamental principles of law and finance operate. It exists at the micro-level as part of the fundamental structure of every financial transaction, and at the macro- level, as a fixed critical point within the relatively stable phases of the law and finance cycle. A key point is that default is equivalent to maximizing uncertainty at the micro-level and at the macro-level, is equivalent to the phase transition where unbearable fluctuations occur in all forms of risk transformation, including maturity, liquidity and credit. As such, default invariance is the glue that links the micro and macro structures of law and finance. In this essay, we apply naïve category theory (NCT), a type of mapping logic, to these types of phenomena. The purpose of using NCT is to introduce a rigorous (but simple) mathematical methodology to law and finance discourse and to show that these types of structural considerations are of prime practical importance and significance to law and finance practitioners. These mappings imply a number of novel areas of investigation. From the micro- structure, three macro-approximations are implied. These approximations form the core analytical framework which we will use to examine the phenomena and hypothesize rules governing law and finance. Our observations from these approximations are grouped into five findings. While the entirety of the five findings can be encapsulated by the three approximations, since the intended audience of this paper is the non-specialist in law, finance and category theory, for ease of access we will illustrate the use of the mappings with relatively common concepts drawn from law and finance, focusing especially on financial contracts, derivatives, Shadow Banking, credit rating agencies and credit crises.

Plurality, policy and the local: can hyperlocals fill the gap?

Over the last 15 years, the acceleration in media consolidation has presented a series of policy challenges around diversity of editorial output. While policy debates on national ownership limits and other regulatory interventions are important, developments at the local level are often marginalised. And yet, the direction of travel—towards more consolidation and more deregulation—has arguably been more debilitating for democracy at the local level, where the vast majority of citizens interact with hospitals, schools, transport systems and local councils. The decline of local media—including, in some towns, the wholesale disappearance of local newspapers—leaves citizens starved of information and local institutions less accountable. This article uses an existing conceptual framework for assessing whether and how journalism makes a real-life contribution to democratic life at the local level. Against this normative framework, it then assesses the contribution of hyperlocal media sites to local democracy. We present findings from the most extensive survey of the hyperlocal sector to date, a collaboration with research partners at Cardiff and Birmingham City Universities and Talk About Local, which analysed online questionnaires from over 180 local online media initiatives. Our research offers a unique insight into the funding, operational problems and sustainability of community media sites, and suggests they have the potential to fulfil a vital democratic and civic role. These data inform our conclusions and recommendations for policy initiatives that would invigorate hyperlocal sites and therefore provide a real alternative for otherwise democratically impoverished local communities.