Journal Article

Reforming the Governance of International Financial Law in the Era of Post-Globalization

Carlo de Stefano

in Journal of International Economic Law

Volume 20, issue 3, pages 509-533
Published in print September 2017 | ISSN: 1369-3034
Published online October 2017 | e-ISSN: 1464-3758 | DOI:
Reforming the Governance of International Financial Law in the Era of Post-Globalization

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  • Financial Law
  • Public International Law
  • International Economic Law
  • Economics


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International financial law (IFL) is evolving from a situation of acquiesced anarchy (characterized by coordination dilemmas, compliance gaps, and unwarranted independence of regulators) towards a more ordinate and coordinated framework. The conceptual crisis of the New International Financial Architecture (NIFA) and the failure of the system of global division of regulatory labour between international financial institutions (IFIs), international setting bodies, and national regulatory authorities have revealed a vacuum of power and mandate. Hints of a shift in the global governance of financial markets are acknowledged in the reform of the Financial Sector Assessment Program (FSAP) and in the potential role of the Reports on Observance of Standards and Codes (ROSCs), jointly administered by the IFIs. The central role of the Financial Stability Board (FSB) as global coordinator has significantly reinforced the functions of monitoring and rationalizing implementation (i.e. with a creative result) of international regulatory standards, in combination with surveillance mechanisms by the International Monetary Fund (IMF). In addition, FSB’s constituency under the G-20 may render its political mandate as more acceptable by Members and stakeholders at large. However, although the framework created in the aftermath of the financial crisis may allow for more coordinated solutions, effective action by governments is missing. This notwithstanding, IFL has largely achieved authoritative characters, in so far as it can determine outcomes and compel obedience. Proceeding from Ernst-Ulrich Petersmann’s posture that international economic law has failed to effectively protect public values and to ensure participatory democracy and global justice, while international law has historically protected individuals from governmental intervention and power abuse, the legitimacy of IFL is critically investigated. To this extent, the Author addresses the superseded theory of Transnational Regulatory Networks (TRNs), which has been partially resumed by the Informal International Lawmaking (IN-LAW) project, the compensatory approach advocated by the Global Administrative Law (GAL) scholarship, and a democratic-striving approach. With a view to the upcoming scenario of ‘post-globalization’, as embodied by the Trump presidency and by the Brexit, the Author envisages a renovated role of the intergovernmental (ministerial) cooperation within the FSB for the protection of global financial stability as public good.

Journal Article.  13417 words. 

Subjects: Financial Law ; Public International Law ; International Economic Law ; Economics

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