The World Economic Forum is meeting in Davos next week. This is an opportunity for the public and private sectors to talk with one another and share their viewpoints on the state of the world.
It has been an eventful year, but it is not quite certain how strong or important the changes resulting from them will be. There has been a general move in financial market regulation across countries and in global institutions to address the issue of systemic risk, but it is not yet clear just how powerful those innovations will be when it comes to limiting behaviour with a high risk of collapse and contagion.
One of the key questions is whether the focus on regulating financial markets has been diverted by exchange rate politics and the corresponding pressures it places on fiscal policy for national governments. As Europe deals with its sovereign debt crisis and China and America struggle over appropriate exchange and macroeconomic policies, will the political will that brought about the development of the Financial Stability Board remain strong enough to develop standards and recommendations? For the FSB is not an international organisation like the UN, the ILO or the WTO. It is based on political will.
That will depend not only on how governments deal with one another in the G20, but how all of them deal with the private sector at Davos next week.
It has been an eventful year, but it is not quite certain how strong or important the changes resulting from them will be. There has been a general move in financial market regulation across countries and in global institutions to address the issue of systemic risk, but it is not yet clear just how powerful those innovations will be when it comes to limiting behaviour with a high risk of collapse and contagion.
One of the key questions is whether the focus on regulating financial markets has been diverted by exchange rate politics and the corresponding pressures it places on fiscal policy for national governments. As Europe deals with its sovereign debt crisis and China and America struggle over appropriate exchange and macroeconomic policies, will the political will that brought about the development of the Financial Stability Board remain strong enough to develop standards and recommendations? For the FSB is not an international organisation like the UN, the ILO or the WTO. It is based on political will.
That will depend not only on how governments deal with one another in the G20, but how all of them deal with the private sector at Davos next week.
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