Financial Stability as a Common Concern of Humankind

doi:10.1017/9781108878739.011

8 - Financial Stability as a Common Concern of Humankind

from Part II - Case Studies

Published online by Cambridge University Press: 04 May 2021

Federico Lupo-Pasini

Edited by

Thomas Cottier

Edited in association with

Zaker Ahmad

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Thomas Cottier: Affiliation:
World Trade Institute
Zaker Ahmad: Affiliation:
World Trade Institute

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Summary

The progressive globalization of finance over the last forty years has been a blessing and a curse for national financial systems. On the one hand, financial institutions, investors, and consumers benefitted from increased opportunities of credit and investment. On the other hand, financial interconnectedness and the reduction of barriers to capital flows have increased exponentially the risk of global financial crises. Regulatory cooperation among financial regulators through the various Transnational Regulatory Networks has decreased the risk of regulatory loopholes and avoided races to the bottom in financial policymaking. Yet, the global financial crisis of 2008 and the European Sovereign Debt crisis have shown that the current approach to global financial governance presents various flaws. The absence of a binding international legal framework for financial cooperation, coupled with the inherent pressure towards financial nationalism faced by national regulators often leads to failures of cooperation and, ultimately, to international crises. This chapter discusses how public international law and the doctrine of Common Concern can help in addressing the inefficiencies of the current system.

Keywords

Financial stability global finance cross-border bank instability financial crises international finance international financial law nationalism systemic risk

Type: Chapter
Information: The Prospects of Common Concern of Humankind in International Law , pp. 400 - 428

DOI: https://doi.org/10.1017/9781108878739.011 [Opens in a new window]

Publisher: Cambridge University Press

Print publication year: 2021

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