Transatlantic Cooperation for Post-Crisis Financial Reform- To What End? Aldo Caldiari

During the 2008-09 financial crisis, the G20 began to meet at the “Heads of State” level to formulate and implement emergency policy responses. Since then, the US and the European Union have been overhauling their own financial regulatory frameworks in parallel processes as well as working on regulatory frameworks in the context of G20 meetings where representatives of the US and five European governments and the EU hold seats. This study examines the question: What are the key issues regarding financial regulation on which transatlantic cooperation (or lack of it) could have an impact? transatlantic_cooperation (Download the full text in…

Drawing Lessons from US Financial Reform Efforts: A Civil Society Perspective Aldo Caliari, Center of Concern

The author analyses the Dodd-Frank Act of reforming the US financial sector from the perspective of the civil society. He studies the role played by the civil society in the wake of the financial crisis and the extent of influence it managed vis-à-vis the more powerful financial sector lobby it was up against. drawing_lessons (Download the full text in PDF format)

Structural Reform Of Systemically Important Financial Institutions: The FSB’s Response To Too Big To Fail Andrew Conford

Earlier this year, the focus was mainly on the Dodd-Frank Wall Street Reform and Consumer Protection Act of the USA. The question of how to address risks posed by Systematically Important Financial Institutions (SIFI) was one of the most contentious issues in this context. During the same period the Financial Stability Board (FSB) issued a less widely noticed document also addressing policy towards SIFIs. The author here reviews the FSB proposals in detail. structural_reform (Download the full text in PDF format)

The Failure of Cross-border Financial Firms: New Thinking in the Aftermath of the Financial Crisis Andrew Cornford

The development of rules for handling insolvencies of financial and non-financial firms with operations in a number of countries (cross-border insolvencies) is a long-standing item on the international regulatory agenda. In this context, the author analyses the measures proposed in various reports to address the problems associated with systemically important financial institutions. financial_firms (Download the full text in PDF format)

The Global Crisis and the Governance of Power in Finance Gary A. Dymski

This paper argues that resolving the global crisis of financial systems depends on recognizing and responding to the considerable, multi-dimensional power accumulated by the very financial firms whose dysfunctionality helped create that crisis in the first place. The existing rhetoric of financial regulation which focuses attention on problems of mechanism design, fails to take into account the presence and implications of systemic power in the system. But unless the debate over financial regulation is broadened, decades of sub-par growth and excessive financial exploitation lie ahead. power_finance (Download the full text in PDF format)

The WTO as Barrier to Financial Regulation Jayati Ghosh

In most parts of the world today (except perhaps in India, where optimism about the benefits of unregulated financial markets still seems to dominate over the undisputable evidence of their many fragilities) most policy makers talk about imposing regulations on the financial sector. Of course, the events of the past two years in the world economy, and particularly in the core capitalist countries, have brought this about, for it is quite a change from the earlier presumption of “efficient markets” that led to widespread lifting of controls and shift to “self-regulation” in the financial sector. In the United States, President…

The Peril of Paradigm Maintenance in the Face of the Crisis Andrew Fischer

This paper addresses how Keynesian narratives are being used to reconstitute an orthodox policy paradigm in the face of the current economic crisis. These processes of paradigm maintenance need to be urgently addressed if the current crisis is to be leveraged for a return to a more progressive, inclusive and developmental policy paradigm in both the North and the South. Failing this, current orthodoxies risk being reconstituted or even reinforced, and we could find ourselves soon entering a new round of development debacles similar to those of early 1980s. paradigm_maintenance (Download the full text in PDF format)

Controlling Dangerous Financial Products through a Financial Precautionary Principle Gerald Epstein and James Crotty

High risk, opaque, and complex financial products have been among the key causes of the current economic crisis. Not only have these products helped cause the crisis but they have also made it extremely difficult to resolve. In response, a number of analysts have proposed a requirement that financial products be approved by a government regulatory authority before they can be marketed. In this paper the authors outline how a financial products regulatory authority would work. controlling_dangerous (Download the full text in PDF format)

New Pathways to Oligarchy: Towards a theory of oligarchic democracy Amiya Kumar Bagchi

In this paper the author argues that as recorded history has shown, any republican government could end up as an oligarchy. In addition to giving a detailed exposition of the various strands in the analysis of oligarchy, the author contends that the Indian experience will add new chapters to the emerging corpus of work on oligarchic democracy. oligarchic_democracy (Download the full text in PDF format)

Restructuring the Financial System: A synthetic presentation of an alternative approach to financial regulation Mario Tonveronachi and Elisabetta Montanaro

Rejecting the current approach to financial regulation based on a laissez faire regime on risk production and allocation, the authors advocate that regulation must contain and monitor systemic risks through a top-down approach, while the resulting morphology must be consistent with market discipline imposing bankruptcies. Apart from rules for risk containment with a sharp distinction between leveraged financial institutions, non-leveraged financial institutions and non-financial firms, the proposed new framework also covers rules for derivatives, markets, transparency, crisis resolution, multinational financial institutions as well as supervisors’ powers and accountability. financial_system (Download the full text in PDF format)