The Evidence and Impact of Financial Globalization

Chapter 40

Market-Based Approach to Financial Architecture

G.R.D. Underhill

University of Amsterdam, Amsterdam, The Netherlands

Outline

Introduction

Postwar Background

Discomfitures of Reality

Toward Financial Globalization 1971–80s

Financial Globalization and ‘Governance Light’ 1990–2007

The Crisis–Reform–Crisis Dance

Back to the Future of Instability and Crisis

References

Introduction

The institutions of financial governance are central to the prospects for financial stability. Without sound regulatory and supervisory institutions, herd behavior and market failure looms large in a liberal financial system. Cross-border and cross-sectoral financial market integration exacerbates these governance problems as well as the problems of macroeconomic ...