Reform of the Global Financial Architecture

Reforms to the global financial architecture, 2023

Calls for reforms of the international financial architecture are becoming ever louder. Governments, UN institutions, expert groups and civil society organizations are criticizing the fact that the network of institutions and rules that currently determine global monetary and financial policy and control global financial flows are not up to the current crises. The international financial architecture is “outdated, dysfunctional and unfair”, according to UN Secretary-General António Guterres. In view of these challenges, the UN Member States made the reform of the international financial architecture a priority topic of the UN Summit of the Future (SotF). It is due to take place at the level of Heads of State and Government in New York on 22 and 23 September 2024. The outcome will be a Pact for the Future. Its content will be negotiated in New York in the months leading up to the Summit. The following six topics are expected to be discussed in the negotiations on the global financial architecture: i. Reforms of the international financial institutions ii. Short-term liquidity and financial safety nets iii. Long-term financing of sustainable development iv. Prevention and management of debt crises v. Reforms of the global tax architecture vi. Regulation of the global financial markets. In view of the intensified geopolitical confrontations, the outcome of the Summit is more than uncertain. Despite the difficult context, however, it does offer some chance of reviving multilateral cooperation and initiating some long overdue reforms in the international system. In addition, the Summit of the Future can be a milestone on the way to the fourth Financing for Development Conference in Spain in 2025. This Briefing Paper provides information on some of the key issues being discussed in the preparatory process for the Summit in the area of global financial architecture reforms, outlines political lines of conflict and describes civil society expectations.

Governing Globalization, 2002

SSRN Electronic Journal, 2000

2000

2005

The international financial system has been the subject of much debate following the financial crises of the 1990s. While many reforms have been proposed for and implemented by mostly developing countries, few changes have been made to the international financial system itself. Fundamentally, the design, institutions, and governance of the international system remain very similar to those of two decades ago. The major changes in global financial markets, financial services industries and economies during this period, however, have rendered the international financial system and its governance of out date. In this paper, we analyse the causes and consequences of the failure to reform. We highlight the forces driving the need for changes in the governance of the international financial system, in particular the combination of the global integration processes and the increased role of the private sector. We then provide insights into the desirable institutional structure for international financial decision-making, also as it relates to the legitimacy of the international system in the eyes of the public worldwide. We also discuss the (political economy) factors inhibiting reform. We conclude with suggestions for future research.

2014

This research examines the internationally coordinated, state-led response to the 2007-2008 economic and financial crisis. It addresses the construction of 'alternative narratives' which encompass a partial revision of the economic paradigm, with a particular emphasis on the role of international financial regulatory authority, its rules and institutionalization. The meta-theoretical theme at the centre of this thesis involves the manner in which severe crisis episodes provoke and also reveal the underlying tension and contestation between 'market authority' and 'state authority' in relation to the regulation of the world economy, financial system and firms, with the goal of ensuring maximization of long-term systemic stability and crisis prevention. The construction of alternative crisis-driven narratives is in part a reaction to the previous ideological hegemonic domination of laissez faire neo-liberal beliefs as applied to deregulation (i.e., of self-regulation by markets and private sector actors in the financial sector). The thesis identifies and examines a paradigm shift in response to the crisis: a move from the I would like to thank all those who have supported me during my research and the writing of this thesis, and I am very grateful for the opportunity to study again at Newcastle University and the School of Geography, Politics and Sociology. My particular thanks to my supervisors, Phil Daniels and Barry Gills. Their careful supervision, encouragement, support, and intellectual guidance, made the research process enjoyable and manageable. They are an outstanding team and it has been a pleasure work with them over the past three-plus years. I cannot name but must warmly acknowledge and thank the scores of individuals who were so generous of their time and who allowed me to interview them regarding the 2007-2008 financial crisis and G20-led intergovernmental response since then. I feel honoured to have been given the time and counsel of presidential and prime ministerial advisors, finance ministers, G20 sherpas, central bank governors and deputy governors, treasury and ministry of finance officials, numerous IMF executive directors, academics, and former senior policy makers. Without their frank insights and personal narratives of the events they experienced, often first-hand, this research would not have been possible. I must also thank my wife, Jean, for allowing me the space to complete this endeavour and for her tolerance of far too many discussions of the subject, the process, and the difficulties it presented. I would also thank my good friend and mentor, Alan Coe, for his advice and support throughout, and Diane Stamm for her careful eye as to style and presentation. I also must acknowledge the support of my employers, and in particular, of Geoffrey Bell, who wholeheartedly supported my decision to conduct the research for this thesis.

European Company and Financial Law Review, 2012

The current financial crisis demonstrated, once again, the need for strengthened international financial cooperation. This article discusses the features of the international financial architecture and recent changes focusing on the role of the Financial Stability Board (FSB). It briefly reviews the postwar BrettonWood arrangements and the changes that occurred after their establishment and recounts the genesis of the FSB and its role in promoting a coherent regulatory framework for a globally integrated financial system

Politics & Society, 2011

The financial crisis has shown how dysfunctional the current international financial architecture is to manage today's global economy. The need to govern globalization has never been clearer, but at the same time the institutional arrangements that we have had never been so impotent. The calls for deep reforms of such architecture and even for a second Bretton Woods Conference are, therefore most welcome. Similar calls for reform were made after the Asian and Russian crises, which engulfed most of the developing world in deep recessions, but they led to at best marginal reforms. The fact that this time the industrial countries are at the center of the storm may lead them into action, but also creates the risk that measures of direct interest to developing countries may be marginalized in the current debate. There are also two fundamental problems with these calls. The first is that they lack scope and, in some cases, even contents. Most of the proposals-for instance, those of the November G20 meeting-relate to macroeconomic action to counter the world recession and to regulatory reform, and in both cases they are largely confined to national policies rather than to the reform of the global architecture. Second, the process started the wrong way, by excluding most countries from the table. It is obviously good for

2017

At their April 2009 summit in London, the G20 leaders announced their first major international governance innovation: the creation of the Financial Stability Board (FSB). The FSB replaced the Financial Stability Forum (FSF), which had been created almost exactly ten years earlier in the wake of the 1997-1998 East Asian financial crisis. The G20 leaders gave the FSB a stronger mandate to promote global financial stability, a wider membership and a more sophisticated internal organizational structure than its predecessor. Our hope is that this compilation of short memos, produced a year or so after the FSB's creation, will promote further debate over the mandate, legitimacy, governance and effectiveness of the institution.

2000

This book was made possible through the ideas, support and contributions of many people and organisations. A particular thanks goes to the participants of the June 2000 conference, held in The Hague, from which this book emerges. Fondad very much appreciates the continuing support of the Dutch Ministry of Foreign Affairs and the co-sponsoring of this conference by the Dutch Ministry of Finance, IDRC, ECLAC, the Commonwealth Secretariat, the International Monetary Fund, and UNCTAD. A special thanks goes to Adriana Bulnes, Naomi Leefmans and Robert Ovetz who assisted me in the publishing of this book.