When Markets Become Mythology: Narrative Performativity and the South Korean Bond Market Crisis
Abstract
This article examines the 2022 South Korean bond market crisis triggered by Heungkuk Life Insurance's decision not to exercise a call option on its perpetual bonds. Although the decision was legally sound and financially rational, markets interpreted it as a betrayal of an unwritten convention, triggering a sharp collapse in bond prices and forcing a rapid capitulation. We analyze this episode through the concept of narrative performativity, highlighting how market narratives do not merely interpret information but actively constitute market reality by disciplining actors and enforcing conformity. Drawing on theories of performativity from speech act philosophy, economic sociology, and anthropological studies of mythology, we show how narratives acquire material force in shaping financial outcomes. The Heungkuk case reveals that financial markets function less as transparent information-processing devices than as arenas of myth, ritual, and power, where collective narratives are continually verified and ritually reaffirmed. Understanding financial markets in this way underscores that belief, narrative authority, and symbolic efficacy are not peripheral but central forces shaping contemporary finance.