Performance Indicators have had to endure severe criticism due to the perverse effects they cause. They lack accuracy, encourage gaming, compare apples and oranges, and are biased towards what is measurable. Yet, despite their well-documented weaknesses, indicators endure. This paper asks why this is the case. What are the latent functions of indicators that legitimise their existence. Our case study is the stress test of the European banking system: a high-profile indicator used for risk regulation. Our findings nuance criticism regarding performance indicators comparing apples and oranges; corroborate and complement earlier research that indicators fulfil important ritualistic, communicative and performative functions; and additionally provide evidence on how performance indicators can foster organisations' capacity to self-regulate, tying into Foucault's notion of governmentality.
