The Institutional Weaknesses in the International Financial System
21 Pages Posted: 27 Mar 2007
Date Written: March 19, 2007
Since 1997 a massive amount of effort has gone into improving the international financial architecture. However, at a level more fundamental than that at which the reformers have worked, the architecture is deeply flawed. The international system has no sovereign bankruptcy regime, no financial regulator, and no lender of last resort. Yet these institutions are widely considered essential for the stability of all national financial systems. This article analyses the effect of these fundamental systemic flaws, and what, if anything, can be done about them.
Keywords: sovereign bankruptcy regime, global lender of last resort, global financial regulator
Suggested Citation: Suggested Citation