Transgovernmental Finance Regulatory Networks

Discussion

Thomas Hale:

"In the realm of finance there has also been an expansion of so-called transgovernmental networks. These have evolved in an ad hoc fashion to respond to various elements of global financial regulation.

They include:

• The Basel Committee on Banking Supervision, a network of central bankers who agree on common, though technically non-binding, standards for banking regulation;

• The International Organization of Securities Commissions, a network of national stock market regulation entities;

• The International Accounting Standards Board, a network of national accounting regulators that includes strong representation from the private sector;

• The International Association of Insurance Supervisors, a network of national and subnational insurance industry regulators; and

• The Financial Stability Board, an umbrella network that brings together national financial regulators (for instance, central banks and finance ministries), international organizations and transgovernmental networks like those cited above.

As technocratic bodies composed primarily of regulators and, in some cases, representatives of industry, these bodies provide useful functions to facilitate the smooth operation of global finance. But only the last of them, the Financial Stability Board, has a mandate to oversee the global financial system as a whole. As in other areas of governance, however, the boldness of the mandate is matched by the weakness of the body’s institutional capacity and regulatory power. While the Financial Stability Board was strengthened with an expanded membership and a more permanent secretariat in the wake of the 2008 crisis (replacing the weaker Financial Stability Forum), it remains chiefly a ‘network of networks’, a forum mainly for discussion and joint monitoring. This is certainly a useful addition to global economic governance, but it is far short of the strong regulatory authority needed to prevent another crisis (Helleiner 2010)."

(https://hdr.undp.org/system/files/documents/halehdr14pdf.pdf)