EconStor >
Danish Institute for International Studies (DIIS), Copenhagen >
DIIS Working Papers, Danish Institute for International Studies >

Please use this identifier to cite or link to this item:

Full metadata record

DC FieldValueLanguage
dc.contributor.authorVestergaard, Jakoben_US
dc.description.abstractDespite the global financial crisis and the prospect of severe economic recession, debates on future financial regulation take little if any notice of reasons why the previous regime of financial regulation failed so spectacularly. The paper identifies the key presumptions underlying efforts to strengthen the 'international financial architecture' (IFA) over the past decade. At the core of the IFA is a set of standards of 'best practice' and the assumption that 'market dis-cipline' rewards and punishes economies according to their degree of compliance with standards. Further, the IFA assumes that 'market-sensitive' risk management promotes the resilience of the international financial system and that the 'soundness' of financial systems may be assessed by aggregating measures of the soundness of individual financial institutions. Historical analysis of the correlation between international capital flows and domestic policy reforms, as well as quanti-tative studies of the correlation between compliance and the cost of capital, demonstrates that financial markets by no means reward and punish economies in accordance with compliance. Evidence further suggests that the current approach to detecting financial vulnerability is mislead-ing and that the promotion of 'market sensitive' risk management undermines rather than in-creases the stability and resilience of the international financial system.en_US
dc.publisherDanish Institute for International Studies (DIIS) Copenhagenen_US
dc.relation.ispartofseriesDIIS working paper 2008:25en_US
dc.subject.stwInternationaler Finanzmarkten_US
dc.subject.stwInternationales Währungssystemen_US
dc.titleCrisis? What crisis? Anatomy of the regulatory failure in financeen_US
dc.typeWorking Paperen_US
Appears in Collections:DIIS Working Papers, Danish Institute for International Studies

Files in This Item:
File Description SizeFormat
58574503X.pdf840.39 kBAdobe PDF
No. of Downloads: Counter Stats
Show simple item record
Download bibliographical data as: BibTeX

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.