Global Financial Governance: Quo Vadis?

The final Roundtable Session of the GDN conference discussed Global Financial Governance, and revealed a range of views and perspectives on the causes of the recent crisis, and some consensus on what needs to be done to avoid – or at least mitigate the worse effects of – the next one.

Ernesto Zedillo, Chair of GDN and Director of Yale Center for the Study of Globalisation, made the simple case for new forms of global governance. He said “We have more intense globalisation, more interdependence and therefore we need more global governance.” He said that the initial impetus for such reform during the 1990s, catalysed in part by the late Willy Brandt’s book ‘Our Global Neighbourhood’, had gone nowhere.

“The G20 Pittsburgh records from 2009 show impeccable analysis. They said we need a co-ordinated response to tackle global imbalances. Then they commissioned a peer-review of macro-economic policies. This is a joke! We will never get global co-ordination without an institutional mechanism with sufficient teeth to make it credible and enforceable.

Alan Taylor, Director of the Center for the Evolution of the Global Economy at the University of California asked ‘What were we thinking?’ Both a rhetorical and a real question, he identified two sets of ‘old views’ which pre-dated the financial crisis. “We thought that financial instability was something that only happened at the periphery, not at the core. That it happened ‘to them’ and not ‘to us’. This was a complacent view, and one that ignored both history and evidence.”

Professor Taylor said that we have learned that ‘contagion happens both ways’, and that those emerging markets that have come through this crisis well were relying on their own fundamentals and insurance put in place before the crisis. “This was perhaps the most important, wise and prudent precaution they had to insulate themselves.”

See more stories from the GDN 2010 Conference, watch participants’ videos interviews, download conference presentations and papers

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About Pier Andrea Pirani
Information, knowledge sharing and communications in international development - Social media and collaboration tools.

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