Too Many Years of Living Dangerously: The UNCTAD Trade and Development Report 2016 Jayati Ghosh

For many years now, the Trade and Development Reports produced by UNCTAD have been providing a voice of sanity in a global discourse on the world economy that has often appeared to be dominated by denial and irrelevance. The Report has also often proved to be remarkably prescient, for example by anticipating as early as 2006 the likely collapse of financial markets that occurred in 2008, or by pointing in the past few years to the futility of excessive reliance on monetary policies alone to lift economic growth, which policy makers are only beginning to come to grips with at…

Coverage of Prudential Measures in the GATS: Some conclusions of a WTO Appellate Body Andrew Cornford

Since issuance of the framework of the General Agreement on Trade in Services (GATS) as part of the results of the Uruguay Round negotiations, there has been a continuing controversy as to the scope which it provides for financial regulation. The principal focus of this controversy has been the so-called of the “prudential carve-out” or “prudential exception” of paragraph 2(a) of the Annex on Financial services. This provides latitude under GATS rules for measures taken by members for prudential reasons affecting their financial sectors, notwithstanding other provisions of the GATS. A recent dispute between Panama and Argentina was the occasion…

Avinash Persaud’s Reinvention of Financial Regulation Andrew Cornford

The work on financial regulation of governments and intergovernmental organisation rolls on with final outcomes promised but seemingly always just over the horizon. Overviews are few owing no doubt both to the complexity of the agenda’s components and to the difficulty of analysing a target still subject to continuous revision. So the new book of Avinash Persaud (Persaud, 2015), which attempts such an overview, is a particularly welcome event, though his assessment is inevitably provisional. Persaud’s career has spanned executive positions at a number of major banks, teaching and managerial positions in academe, and analysis and proposals concerning the financial…

China’s Exploding Debt C.P. Chandrasekhar

If the international media are to be believed the world, still struggling with recession, is faced with a potential new threat emanating from China. Underlying that threat is a rapid rise in credit provided by a “shadow banking” sector to developers in an increasingly fragile property market. Efforts to address the property bubble or reduce fragility in the financial system can slow China’s growth substantially, aggravating global difficulties. The difficulty here is that the evidence is patchy and not always reliable. According to one estimate, since the post-crisis stimulus of 2008, total public and private debt in China has risen…

No Standards, Not Poor C.P. Chandrasekhar

Early February, the Department of Justice (DoJ) of the US government—represented by the United States attorney general and supported by attorneys general from 16 states—filed civil fraud charges against the ratings giant Standard & Poor’s (S&P). S&P is the largest of the big three agencies—the other two being Moody’s and Fitch—which, for a fee, take on the task of assessing how risky and robust securities of different kinds issued by financial firms are. The charges were not minor. The DoJ argues that for more than three years between September 2004 and October 2007, S&P “knowingly and with the intent to…