Assessing changes in the global financial architecture from an emerging market perspective

Ashima Goyal

Indira Gandhi Institute of Development Research, Mumbai Working Papers from Indira Gandhi Institute of Development Research, Mumbai, India

Abstract: The paper assesses changes in the global financial architecture and related global governance. Despite useful reforms lacunae remain. Analysis of financial regulations and measures to address global imbalances show serious weaknesses in addressing risks from shadow banking and large banks that are responsible for volatile capital flows to emerging markets (EMs). The underlying philosophy that intervention and controls distort markets and manipulate currencies weakens the toolbox available to EMs to deal with volatile capital flows. The use of interest rates, quantitative easing, and deficits are regarded as a valid response to domestic conditions, and their effect on commodity price inflation hitting EMs not acknowledged. Despite greater representation of EMs in the G-20 adjustment continues to be asymmetric. This harms global stability and recovery. Universal adoption of some basic minimal measures can close arbitrage gaps and resolve many problems.

Keywords: Global financial architecture; regulations; imbalances; currency wars; international governance (search for similar items in EconPapers)
JEL-codes: F02 F32 F33 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2013-04
New Economics Papers: this item is included in nep-mon
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http://www.igidr.ac.in/pdf/publication/WP-2013-006.pdf (application/pdf)

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Journal Article: Assessing Changes in the Global Financial Architecture from an Emerging Market Perspective (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ind:igiwpp:2013-006

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