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8 - Financial Stability as a Common Concern of Humankind

from Part II - Case Studies

Published online by Cambridge University Press:  04 May 2021

By
Federico Lupo-Pasini
Edited by
Thomas Cottier
Edited in association with
Zaker Ahmad
Thomas Cottier
Affiliation:
World Trade Institute
Zaker Ahmad
Affiliation:
World Trade Institute
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Summary

The progressive globalization of finance over the last forty years has been a blessing and a curse for national financial systems. On the one hand, financial institutions, investors, and consumers benefitted from increased opportunities of credit and investment. On the other hand, financial interconnectedness and the reduction of barriers to capital flows have increased exponentially the risk of global financial crises. Regulatory cooperation among financial regulators through the various Transnational Regulatory Networks has decreased the risk of regulatory loopholes and avoided races to the bottom in financial policymaking. Yet, the global financial crisis of 2008 and the European Sovereign Debt crisis have shown that the current approach to global financial governance presents various flaws. The absence of a binding international legal framework for financial cooperation, coupled with the inherent pressure towards financial nationalism faced by national regulators often leads to failures of cooperation and, ultimately, to international crises. This chapter discusses how public international law and the doctrine of Common Concern can help in addressing the inefficiencies of the current system.

Keywords

Financial stabilityglobal financecross-border bankinstabilityfinancial crisesinternational financeinternational financial lawnationalismsystemic risk
Type
Chapter
Information
The Prospects of Common Concern of Humankind in International Law , pp. 400 - 428
Publisher: Cambridge University Press
Print publication year: 2021

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