Global Financial Architecture
The global financial crisis that began in South East Asia in 1997 highlighted the failure of the current global financial system or global financial architecture, as it is sometimes called, to provide economic stability, redistribute wealth, eradicate poverty and protect the environment. The current global financial architects, namely the G8/G20 and the IMF advocate without respect for a country’s context, deregulating capital movements and liberalizing the financial services sector. They favour foreign investors and investment over domestic, and provide investors unprecedented rights at the expense of citizens and governments. Civil society groups are advocating to open the debate about what constitutes a sound macroeconomic choices, as current narrow set of choices are failing. Capital controls, including the Tobin tax, cancelling debt, performance requirements on foreign direct investment and national ownership of the financial services sector, are all viable choices for a government concerned with eradicating poverty, creating jobs and growing the economy.
Section Articles
A Call to Action
A Citizen's Agenda for Reform of the Global Economic System
Proposals for Bailing In the Private Sector
The concept of “bailing in”, sometimes described as “private sector involvement” (PSI), has become a prominent theme in proposals for global financial reform in the wake of the emerging markets financial crises in Asia, Russia and Brazil during 1997-98. The G-20, the Financial Stability Forum and the IMF are currently considering various sorts of bailing in mechanisms. The principle is simple: how to prevent short-term private investors from fleeing emerging markets during times of instability.
