Summing Up and Conclusion

Kern Alexander, Rahul Dhumale and John Eatwell

in Global Governance of Financial Systems

Published in print September 2005 | ISBN: 9780195166989
Published online September 2007 | e-ISBN: 9780199783861 | DOI:
 Summing Up and Conclusion

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This chapter presents a summary of the main themes of the preceding chapters. It presents the following principles to guide in the design of the new international financial architecture: (i) full cognizance of the social costs of the externality of systemic risk is needed, particularly its macroeconomic impact; (ii) homogeneity of market behavior is a threat to liquidity, particularly at time of high volatility, when convention has broken down; (iii) steps need to be taken to reinforce the stabilizing power of convention; (iv) international policy formation and implementation should be international in scope because financial markets are today international; and (v) international decision making and standard setting should be effective in devising principles of efficient regulation, accountable in terms of transparency and clear lines of decision-making authority.

Keywords: financial regulation; international regulation; financial risk; Basel II; risk; policy formulation

Chapter.  9512 words. 

Subjects: Financial Markets

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