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Conclusions and agenda for further research

Published online by Cambridge University Press:  08 July 2009

Rainer Grote
Affiliation:
Senior Research Fellow Max-Planck Institute Heidelberg Germany
Thilo Marauhn
Affiliation:
Professor Justus Liebig University Giessen Germany
Rainer Grote
Affiliation:
Max-Planck-Institut für ausländisches öffentliches Recht und Völkerrecht, Germany
Thilo Marauhn
Affiliation:
Justus-Liebig-Universität Giessen, Germany
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Summary

1. There seems to be a widespread consensus today that some form of regulation of international finance is needed in order to take full advantage of the potentially huge benefits of open markets for capital while at the same limiting the risk of serious economic breakdown resulting from the inherently volatile character of those markets. It is generally recognised that the dismantling of exchange controls which started in the 1970s together with the development of modern computer and telecommunications technology over the last two decades have created unprecedented opportunities for global investment and international trade in capital: time and space have become virtually irrelevant in global financial markets. On the other hand, experience has shown that the sound operation of financial markets is threatened by instabilities which are far greater than those involved in the trade of goods and services. Financial collapses have a unique capacity for projecting their effects right across the domestic economy, and in the worst cases far beyond that, across the region and even across the world. The root causes for the instability of financial markets lie in the insufficient screening of investments risks by the providers of foreign capital and the local financial intermediaries alike, as well as in the huge potential for speculation created by the liberalisation of foreign exchange markets which can give rise to extreme fluctuations in short-term capital movements.

2. The need for regulating international financial markets can therefore hardly be questioned in principle.

Type
Chapter
Information
The Regulation of International Financial Markets
Perspectives for Reform
, pp. 316 - 332
Publisher: Cambridge University Press
Print publication year: 2006

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  • Conclusions and agenda for further research
    • By Rainer Grote, Senior Research Fellow Max-Planck Institute Heidelberg Germany, Thilo Marauhn, Professor Justus Liebig University Giessen Germany
  • Edited by Rainer Grote, Max-Planck-Institut für ausländisches öffentliches Recht und Völkerrecht, Germany, Thilo Marauhn, Justus-Liebig-Universität Giessen, Germany
  • Book: The Regulation of International Financial Markets
  • Online publication: 08 July 2009
  • Chapter DOI: https://doi.org/10.1017/CBO9780511494505.017
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  • Conclusions and agenda for further research
    • By Rainer Grote, Senior Research Fellow Max-Planck Institute Heidelberg Germany, Thilo Marauhn, Professor Justus Liebig University Giessen Germany
  • Edited by Rainer Grote, Max-Planck-Institut für ausländisches öffentliches Recht und Völkerrecht, Germany, Thilo Marauhn, Justus-Liebig-Universität Giessen, Germany
  • Book: The Regulation of International Financial Markets
  • Online publication: 08 July 2009
  • Chapter DOI: https://doi.org/10.1017/CBO9780511494505.017
Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

  • Conclusions and agenda for further research
    • By Rainer Grote, Senior Research Fellow Max-Planck Institute Heidelberg Germany, Thilo Marauhn, Professor Justus Liebig University Giessen Germany
  • Edited by Rainer Grote, Max-Planck-Institut für ausländisches öffentliches Recht und Völkerrecht, Germany, Thilo Marauhn, Justus-Liebig-Universität Giessen, Germany
  • Book: The Regulation of International Financial Markets
  • Online publication: 08 July 2009
  • Chapter DOI: https://doi.org/10.1017/CBO9780511494505.017
Available formats
×