Jasper Blom

Global financial integration thirty years on: from reform to crisis

Introduction: the challenges and prospects of global financial integration Geoffrey R. D. Underhill, Jasper Blom and Daniel Mugge Part I. History and Context: Input, Output and the Current Architecture (Whence it Came): 1. Financial governance in historical perspective: lessons from the 1920s Randall Germain 2. Between the storms: patterns in global financial governance 2001-7 Eric Helleiner and Stefano Pagliari 3. Deliberative international financial governance and apex policy forums: where we are and where we should be headed Andrew Baker 4. Finance, globalisation and economic development: the role of institutions Danny Cassimon, Panicos Demetriades and Bjorn Van Campenhout Part II. Assessing the Current Financial Architecture (How Well Does it Work?): 5. Adopting international financial standards in Asia: convergence or divergence in the global political economy Andrew Walter 6. The political economy of Basel II in the international financial architecture Stijn Claessens and Geoffrey R. D. Underhill 7. The catalytic approach to debt workout in practice: coordination failure between the IMF, the Paris Club and official creditors Eelke de Jong and Koen van der Veer 8. Empirical evidence on the new international aid architecture Stijn Claessens, Danny Cassimon and Bjorn van Campenhout 9. Who governs and why? The making of a global anti-money laundering regime Eleni Tsingou 10. Brazil and Argentina in the global financial system: contrasting approaches to development and foreign debt Victor Klagsbrunn 11. Global markets, national alliances and financial transformations in East Asia Xiaoke Zhang Part III. What Does the Future Hold? Reactions to the Current Regime and Prospects for Progress (Where is it Going?): 12. Changing transatlantic financial regulatory relations at the turn of the millennium Elliot Posner 13. Monetary and financial co-operation in Asia: improving legitimacy and effectiveness? Heribert Dieter 14. From microcredit to microfinance to inclusive finance: a response to global financial openness Brigitte Young 15. Combating pro-cyclicality in the international financial architecture: towards development-friendly financial governance Jose Ocampo and Stephany Griffith-Jones 16. Public interest, national diversity and global financial governance Geoffrey R. D. Underhill and Xiaoke Zhang Conclusion: whither global financial governance after the crisis? Daniel Mugge, Jasper Blom and Geoffrey R. D. Underhill.

Conclusion: whither global financial governance after the crisis?

For global finance, the year 2008 may prove to be a watershed. The collapse of Lehman Brothers on 15 September of that year brought the global financial system to the brink of meltdown, and much of the world has been experiencing the deepest recession for more than half a century. Only the timely intervention of public authorities prevented a rerun of the 1930s depression. A consensus formed around the unsurprising conclusion that global financial governance was in need of reform – both to ensure a more effective and coordinated crisis response and to prevent a rerun in the future. At least ex ante , the London G20 Summit in April 2009 and the Philadelphia follow-up held in the autumn of 2009 were hailed as stepping stones to an overhaul of the global financial architecture. Many observers saw an opportunity for wholesale reform, which had been so conspicuously absent after the crises of the late 1990s and early 2000s, as Helleiner and Pagliari have argued in Chapter 2. The speed and drama of the crisis have meant that the contributions to this volume ran the risk of obsolescence before they could be published. The crisis might well have ushered in sufficiently dramatic change as to relegate many of the institutions, norms and practices analysed in this book to the dustbin of history.

Global Financial Integration Thirty Years On: Does the future hold? Reactions to the current regime and prospects for progress (where is it going?)

Introduction: the challenges and prospects of global financial integration Geoffrey R. D. Underhill, Jasper Blom and Daniel Mugge Part I. History and Context: Input, Output and the Current Architecture (Whence it Came): 1. Financial governance in historical perspective: lessons from the 1920s Randall Germain 2. Between the storms: patterns in global financial governance 2001-7 Eric Helleiner and Stefano Pagliari 3. Deliberative international financial governance and apex policy forums: where we are and where we should be headed Andrew Baker 4. Finance, globalisation and economic development: the role of institutions Danny Cassimon, Panicos Demetriades and Bjorn Van Campenhout Part II. Assessing the Current Financial Architecture (How Well Does it Work?): 5. Adopting international financial standards in Asia: convergence or divergence in the global political economy Andrew Walter 6. The political economy of Basel II in the international financial architecture Stijn Claessens and Geoffrey R. D. Underhill 7. The catalytic approach to debt workout in practice: coordination failure between the IMF, the Paris Club and official creditors Eelke de Jong and Koen van der Veer 8. Empirical evidence on the new international aid architecture Stijn Claessens, Danny Cassimon and Bjorn van Campenhout 9. Who governs and why? The making of a global anti-money laundering regime Eleni Tsingou 10. Brazil and Argentina in the global financial system: contrasting approaches to development and foreign debt Victor Klagsbrunn 11. Global markets, national alliances and financial transformations in East Asia Xiaoke Zhang Part III. What Does the Future Hold? Reactions to the Current Regime and Prospects for Progress (Where is it Going?): 12. Changing transatlantic financial regulatory relations at the turn of the millennium Elliot Posner 13. Monetary and financial co-operation in Asia: improving legitimacy and effectiveness? Heribert Dieter 14. From microcredit to microfinance to inclusive finance: a response to global financial openness Brigitte Young 15. Combating pro-cyclicality in the international financial architecture: towards development-friendly financial governance Jose Ocampo and Stephany Griffith-Jones 16. Public interest, national diversity and global financial governance Geoffrey R. D. Underhill and Xiaoke Zhang Conclusion: whither global financial governance after the crisis? Daniel Mugge, Jasper Blom and Geoffrey R. D. Underhill.

Global Financial Integration Thirty Years On: List of tables

Introduction: the challenges and prospects of global financial integration Geoffrey R. D. Underhill, Jasper Blom and Daniel Mugge Part I. History and Context: Input, Output and the Current Architecture (Whence it Came): 1. Financial governance in historical perspective: lessons from the 1920s Randall Germain 2. Between the storms: patterns in global financial governance 2001-7 Eric Helleiner and Stefano Pagliari 3. Deliberative international financial governance and apex policy forums: where we are and where we should be headed Andrew Baker 4. Finance, globalisation and economic development: the role of institutions Danny Cassimon, Panicos Demetriades and Bjorn Van Campenhout Part II. Assessing the Current Financial Architecture (How Well Does it Work?): 5. Adopting international financial standards in Asia: convergence or divergence in the global political economy Andrew Walter 6. The political economy of Basel II in the international financial architecture Stijn Claessens and Geoffrey R. D. Underhill 7. The catalytic approach to debt workout in practice: coordination failure between the IMF, the Paris Club and official creditors Eelke de Jong and Koen van der Veer 8. Empirical evidence on the new international aid architecture Stijn Claessens, Danny Cassimon and Bjorn van Campenhout 9. Who governs and why? The making of a global anti-money laundering regime Eleni Tsingou 10. Brazil and Argentina in the global financial system: contrasting approaches to development and foreign debt Victor Klagsbrunn 11. Global markets, national alliances and financial transformations in East Asia Xiaoke Zhang Part III. What Does the Future Hold? Reactions to the Current Regime and Prospects for Progress (Where is it Going?): 12. Changing transatlantic financial regulatory relations at the turn of the millennium Elliot Posner 13. Monetary and financial co-operation in Asia: improving legitimacy and effectiveness? Heribert Dieter 14. From microcredit to microfinance to inclusive finance: a response to global financial openness Brigitte Young 15. Combating pro-cyclicality in the international financial architecture: towards development-friendly financial governance Jose Ocampo and Stephany Griffith-Jones 16. Public interest, national diversity and global financial governance Geoffrey R. D. Underhill and Xiaoke Zhang Conclusion: whither global financial governance after the crisis? Daniel Mugge, Jasper Blom and Geoffrey R. D. Underhill.

Global Financial Integration Thirty Years On: Acknowledgements

Introduction: the challenges and prospects of global financial integration Geoffrey R. D. Underhill, Jasper Blom and Daniel Mugge Part I. History and Context: Input, Output and the Current Architecture (Whence it Came): 1. Financial governance in historical perspective: lessons from the 1920s Randall Germain 2. Between the storms: patterns in global financial governance 2001-7 Eric Helleiner and Stefano Pagliari 3. Deliberative international financial governance and apex policy forums: where we are and where we should be headed Andrew Baker 4. Finance, globalisation and economic development: the role of institutions Danny Cassimon, Panicos Demetriades and Bjorn Van Campenhout Part II. Assessing the Current Financial Architecture (How Well Does it Work?): 5. Adopting international financial standards in Asia: convergence or divergence in the global political economy Andrew Walter 6. The political economy of Basel II in the international financial architecture Stijn Claessens and Geoffrey R. D. Underhill 7. The catalytic approach to debt workout in practice: coordination failure between the IMF, the Paris Club and official creditors Eelke de Jong and Koen van der Veer 8. Empirical evidence on the new international aid architecture Stijn Claessens, Danny Cassimon and Bjorn van Campenhout 9. Who governs and why? The making of a global anti-money laundering regime Eleni Tsingou 10. Brazil and Argentina in the global financial system: contrasting approaches to development and foreign debt Victor Klagsbrunn 11. Global markets, national alliances and financial transformations in East Asia Xiaoke Zhang Part III. What Does the Future Hold? Reactions to the Current Regime and Prospects for Progress (Where is it Going?): 12. Changing transatlantic financial regulatory relations at the turn of the millennium Elliot Posner 13. Monetary and financial co-operation in Asia: improving legitimacy and effectiveness? Heribert Dieter 14. From microcredit to microfinance to inclusive finance: a response to global financial openness Brigitte Young 15. Combating pro-cyclicality in the international financial architecture: towards development-friendly financial governance Jose Ocampo and Stephany Griffith-Jones 16. Public interest, national diversity and global financial governance Geoffrey R. D. Underhill and Xiaoke Zhang Conclusion: whither global financial governance after the crisis? Daniel Mugge, Jasper Blom and Geoffrey R. D. Underhill.

Introduction: the challenges and prospects of global financial integration

The bitter winds of financial crisis have once again swept global markets, this time beginning at the core of the system, Wall Street. Whether blame be assigned to private greed, public policy lapses, or both, vast sums of public money and shareholder capital have been wiped out in the otherwise noble cause of preventing systemic breakdown. Vulnerable citizens once more count the costs to the real economy. As massive liquidity has been made available to private financial institutions on exceptionally permissive terms, it has been difficult not to notice the striking contrast with the management of earlier crises based in the emerging markets. When they were in the dock, the emphasis was on the conditionality of the terms of rescue; with Wall Street and the City in trouble, the terms of rescue have been much more open-ended. As growing uncertainty combined with these apparent double standards, the crisis has reopened debate on the global financial architecture, public policy and regulation. Global financial integration and the governance of the global monetary and financial system stand at a crossroads after over thirty years of market-oriented cross-border integration and development preceded and indeed exacerbated a financial crisis on a scale not seen since the 1930s. This ongoing process of integration, regularly punctuated by crises and instability, raises analytical, normative and policy dilemmas which challenge our current understanding of financial and monetary governance. Many scholars argue that higher levels of economic integration require greater degrees of regional and global governance (e.g. Cerny 1995; Zurn 2004). Yet the relationships between economic integration, competitive market dynamics, international political cooperation and potentially new patterns of multilevel governance remain unclear as policy-makers face the difficult task of reform while still coping with the consequences of crisis. While the capacity of the current global financial architecture to cope with monetary and financial challenges is once again in serious doubt, the future direction of reform remains uncertain. To complicate matters further, not only the capacity and efficiency, but also the legitimacy