CentreForum has released a new publication on the thorny issue of how to make sure the US and Europe do not proceed down contradictory paths in designing future financial regulation.

It is by my colleage John Springford, with whom I collaborated in producing “Divided we fall: can the G20 save globalisation?

John has an OpEd in Guardian America laying out some of the issues.  This paragraph summarises many of the problems being confronted:

International co-operation is always difficult, except in times of severe crisis. Now we are over the worst, it is unsurprising that financial reform is being driven by national interests. But, of course, finance is global, and apparently small differences in securitisation, derivatives, capital and trading rules are big opportunities for arbitrage. Capital will shift into countries where the returns are greatest.

Anyone claiming to have solved these issues would be a fool.  We don’t.   But we still believe that greater commitment towards the G20 as a forum might prevent regulatory gaps helping to cause a return to financial instability in the future.

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One thought on “New publication on international financial regulation

  1. “Anyone claiming to have solved these issues would be a fool. ”

    I like to think I am not a fool, but I inadvertently cracked this problem ten years ago when I set up a ‘Dot Com’ whose business was to replace paper-based contract confirmations (by fax and telex) with a generic transaction registry.

    When I gave evidence to the Treasury Select Committee re oil market regulation at the time of the ‘bubble’ to $147/bbl my advice – based upon my experiences and subsequent analysis – was the creation of global transaction registries.

    http://www.theherald.co.uk/business/news/display.var.2403340.0.Trade_body_should_be_in_control_of_oil_sales.php

    If governments insist that major players participate, then all the rest will follow, and the outcome of mandatory transaction registration is that:

    (a) data is available to regulators;

    (b) an enforcement sanction is available of termination or suspension of membership of the registry user group; which

    (c) enables enforcement of agreed market standards.

    I outlined a view of a new global networked market architecture here

    http://www.mondovisione.com/index.cfm?section=articles&action=detail&id=38754

    almost ten years ago, and it’s now being picked up more widely.

    The key to it lies in the enterprise model – ie the legal and financial architecture and global protocols used.

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