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The Political Economy of Global Financial Governance System

Published:2018-06-14 Published:2018-06-14   Author:Zhang Falin   [Small] [Middle] [Big] [More]

The 2008 global financial crisis has triggered an overhaul of global financial governance system. With regard to organizational structure, the current system is a networked architecture which is centered on the G20 and the FSB and consists of seven types of actors. These actors include the two core players (G20 and FSB), Bretton Woods institutions, major countries and regions, relevant international inter-and non-governmental organizations, peripheral countries and regions, and other non-governmental actors. These actors constitute a complex networked structure of global financial governance. As to regulatory regime, the current system is a regime complex, in which various sub-regimes about banking, insurance, securities, accounting and others are interconnected with each other. Thus the current global financial governance system is a quasi-formal system, which lies between completely formal and informal international institutions. In the system, major countries and international organizations govern global finance in a minilateral way. The global financial governance system still faces such difficulties as “free riding” phenomenon in collective action, inability of the G-20-based informal relationship to integrate the fragmented financial governance system, lack of international legitimacy of the networked structure and regime complex based on minilateralism, and insufficient effectiveness of the current system.

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