‘History has a way of repeating itself in financial matters because of a kind of sophisticated stupidity,’ John Kenneth Galbraith once wrote.
In this superb new book, Ross Buckley suggests that the stupidity identified by Galbraith can be traced to the persistence of an inadequate legal system for the regulation of international finance − a system rooted in the failure of economists and investors to take the legal demands of real-world finance seriously. Everywhere, trade is glorified while finance tends to be taken for granted. Yet financial flows far exceed trade flows, by a factor of over sixty to one; international financial transactions represent a far greater proportion of the practice of most major law firms than do trade transactions; and international finance, when it goes wrong, brings appalling suffering to the poorest citizens of poor countries.
In a powerful demonstration of how we can learn from history, Professor Buckley provides deep analyses of some of the devastating financial crises of the last quarter-century. He shows how such factors as the origins and destinations of loans, bank behaviour, bad timing, ignorance of history, trade regimes, capital flight, and corruption coalesce under certain circumstances to trigger a financial crash. He then offers well-thought out legal measures to regulate these factors in a way that can prevent the worst from happening and more adequately protect the interests of vulnerable parties and victims. In the course of the discussion he covers such topics as the following:
- the roles of the Bretton Woods institutions in the globalisation process
- global capital flows
- debtor nation policies
- the effects of the Brady restructurings of the 80s and 90s
- fixed versus floating exchange rates
- the social costs of IMF policies
- debt-for-development exchanges and
- the national balance sheet problem.
Professor Buckley’s far-reaching recommendations include details of tax, regulatory, banking, and bankruptcy regimes to be instituted at a global level.
As a general introduction to the international financial system and its regulation; as a powerful critique of the current system’s imperfections; and most of all as a viable overarching scheme for an international finance law framework soundly based on what history has taught us, International Financial System: Policy and Regulation shows the way to amending a system that repeatedly sacrifices the lives of thousands and compromises the future of millions.
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Introduction PART I Multilateralism, Regionalism and Bilateralism, Multilateralism: The Doha Round and the Hong Kong Declaration, The Honourable Christine Lagarde Trade and Security Tango, The Honourable Tim Fischer PART II. Policies and Strategies for Trade Liberalization, The Prisoners’ Dilemma and FTAs: Applying Game Theory to Trade Liberalization Strategy, Meredith Kolsky Lewis. Japanese Policies toward East Asian Free Trade Agreements: Policy and Legal Perspectives, Mitsuo Matsushita. The RTA Strategy of China: A Critical Visit, Henry Gao. Stepping Stones and Stumbling Blocks: Vietnam’s Regional. Trade Arrangements and WTO Accession, Lisa Toohey. PART III. Established Models and Emerging, Models of FTAs. Regional Trade, the WTO and the NAFTA Model, Maureen Irish . The Australia–United States Free Trade Agreement, Andrew D. Mitchell. The Beginning of Economic Integration between East Asia and North America? The US–Korea FTA, Yong-Shik Lee. PART V. Impact of FTAs on Specific Areas. Services and Investment in the Free Trade Agreements: Liberalization, Regulation and Law, Chris Arup. The Legitimacy and Purpose of Intellectual Property Chapters in FTAs, Susy Frankel. Developing States, the Generalized System of Preferences and Trade Measures to Enhance Human Rights, Dr Anthony E Cassimatis. Preferential Trade and Cultural Products, Michael Hahn. Dispute Settlement under PTAs: Political or Legal? David Morgan. Further Reading, Index