Introduction

Financial crises have occurred throughout the history of capitalism – from the Dutch tulip mania in 1637–8 and the Indian cotton futures market crash of 1866, over the Great Depression of 1929, to the financial crises of the 1980s and 1990s.

While industrial countries have reduced the incidence and severity of financial crises over the last seventy years, financial crises have become more frequent in developing countries since the 1980s. With every such wave of crises, there are calls for major changes in the governance of financial markets, aimed at improving their efficiency, reducing their vulnerability and increasing their legitimacy. And while sometimes these calls are indeed heeded, in particular when major disruptions occur, many times the appetite for a grand new design diminishes as economies recover. To some extent, this can be said about the latest discussion regarding economic governance of financial markets – which rose to prominence as a quest for a ‘new international financial architecture’. Still, with Argentina in severe distress and clouds hanging over Brazil and Turkey, this might be a good time to revisit some of the reforms proposed and enacted in the wake of the ‘international financial crises’ of the 1990s – the tequila crisis in Mexico 1995, East Asia in 1997–98, Russia in 1998, and Brazil in 1998–99.