Towards a Global Financial Architecture: Capital Mobility and Risk Management Issues

26 Pages Posted: 25 Nov 1999

See all articles by Peter Christoffersen

Peter Christoffersen

University of Toronto - Rotman School of Management; Copenhagen Business School; Aarhus University - CREATES

Vihang R. Errunza

McGill University - Desautels Faculty of Management

Abstract

In recent years, we have witnessed a significant loss of national welfare from economic crises resulting from weakness of the global financial system. After analyzing the root causes of this experience, we focus on two major fault lines that have characterized most of these occurrences: First, we review the arguments in favor of and against the open capital markets paradigm. We identify factors that must be taken into account for a successful integration of the national economies in the global capital market. Second, we discuss the lack of attention to innovations in risk management practices, which deal with the new sources of risk inherent in an increasingly integrated and complex global economy. Finally, we suggest some desirable democratic features and the importance of recognizing national architectures in the design of a new global financial architecture.

JEL Classification: F32, G15

Suggested Citation

Christoffersen, Peter and Errunza, Vihang R., Towards a Global Financial Architecture: Capital Mobility and Risk Management Issues. Available at SSRN: https://ssrn.com/abstract=184628 or http://dx.doi.org/10.2139/ssrn.184628

Peter Christoffersen (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5P 3C4
Canada
416-946-5511 (Phone)

Copenhagen Business School

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

Aarhus University - CREATES

School of Economics and Management
Building 1322, Bartholins Alle 10
DK-8000 Aarhus C
Denmark

Vihang R. Errunza

McGill University - Desautels Faculty of Management ( email )

1001 Sherbrooke St. West
Montreal, Quebec H3A1G5 H3A 2M1
Canada
514-398-4056 (Phone)
514-398-3876 (Fax)

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