The Limits of Incrementalism: The G20, the FSB, and the International Regulatory Agenda

Abstract

At their very first summit in Washington in November 2008, the G20 \nleaders placed the reform of international financial regulation at the core of their \nagenda. The issue has retained a central place in discussions and communiqués at \nevery subsequent meeting. It has been remarkable to see heads of state commit \nsuch detailed attention in their communiqués to a topic which has historically \nbeen the more obscure preserve of technocratic officials. Equally striking has \nbeen the fact that policymakers have looked beyond the immediate task of \nmanaging the crisis to focus on this more forward-looking agenda to prevent \nfuture crises. It took more than a decade after the crisis of the early 1930s for \npolitical leaders to agree at the 1944 Bretton Woods conference on international \nfinancial reforms designed to prevent a repetition of that economic calamity. This \ntime around, the crisis has been used as an immediate catalyst for reform. \nBut what have the G20 leaders actually accomplished so far in this field? \nThere is no question that they have successfully negotiated more initiatives in this \narea than in any other, initiatives that are aimed at reforming both the content and \nthe governance of international financial regulation. While the breadth of these \nreforms has been impressive, they also suffer from some important limitations. \nDespite the scale of the crisis, the reforms have been much more incremental than \nradical. Their implementation has also been slow and uneven, and some important \nissues have been neglected entirely. As we have entered a new phase of financial \ninstability unleashed by the eurozone’s difficulties, these limitations have become \nincreasingly evident, with political consequences that are very difficult to predict.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 44 citations exist upstream.