Global Finance at Risk: The Case for International Regulation

by John Eatwell, Lance Taylor

In Global Finance at Risk , two economists whom John Kenneth Galbraith has hailed as "accomplished scholars of the first rank" propose a bold solution to the financial crises that threaten us a World Financial Authority with powers to establish worldwide best-practice financial regulation and risk management. Expansion of finance in industrialized economies, including that of the nineteenth-century United States, was accompanied by the same kind of turbulence now afflicting Asia, Russia, and Latin America. Then, the solution was to establish national banking and securities regulators, create deposit insurance, and empower lenders of last resort. But in our increasingly globalized times, an account opened at a local bank can be based on bad debt from anywhere in the world, including places outside the jurisdiction of those national agencies. And when banks fail, it is not only their account holders who suffer, but all of us. This is why, argue John Eatwell and Lance Taylor in this timely and urgent book, effective regulation of international finance is crucial to the economic health of all nations. Global Finance at Risk casts a welcome light on the deepening intricacies of world financial systems.

Genres: Economics, Finance

272 pages, Paperback

First published January 1, 2000

Reviews

[Scott Goddard · Rating 5 out of 5]

Reading this with the benefit of hindsight makes it almost comical. From outlining the merits and demerits of a liberalized financial market on a global level, the two esteemed authors expound an advisory cure to the inexorable volatility, uncertainty, and arbitrary so deeply characteristic of the unimpeded financialisation espoused by the orthodoxy of their day (and indeed today, however to a lesser extent). What they had in mind was an global entity under the title of the International Financial Authority, who would adopt a regulatory role in order to ensure systemic risk is either stamped out whilst nascent or mitigated when emergent. Published in 2001, the predication by the pair that a global financial crisis is looming is the very definition of prescient given the 2008 catastrophe - something that could have been foreseen at the very least in part, or completely obviated if their book was acknowledged without bias inclinations.

[Mark Tuminello · Rating 4 out of 5]

The International Financial Authority was meant to serve as a regulatory group to eliminate risk. That was the idea of the authors, anyway. As we all know, the 2008 recession they basically predicted came to pass. The authors were able to predict this back in 2001. Others in their field had similar predictions, but there were still more who continued operating as if it could never happen.