Do we have a genuine global financial system? This chapter challenges the strong notion that the recent financial crisis was global in scope. It examines and troubles several key aspects of the recent events, asking whether the international financial system is a genuinely ‘global’ one, whether the crisis itself was ‘global’ in its characteristics, and what the nature of the term ‘crisis’ means. It argues that the international financial system is quite differentiated, being made up of domestic-national, supra-national regional and inter-national aspects. The system is characterized by contagion, however, and the chapter goes on to consider the role of this in generating slipovers into the wider economic mechanism. And given this characterization of the financial system, the implications for how to organize a regulatory response are pursued. Here the argument is that the principle of ‘distributed preparedness for resilience’ should guide this response, not a new set of top-down global rules and norms organized once again by the institutions of global economic governance.
Paul Hirst and Grahame Thompson
Before we consider the future of ‘globalisation’ we must deﬁne its nature and outline its past. This is a complex and contested concept. If we take growing international interconnectedness – increasing ﬂows of trade, investment and communications between nations – to be what most people mean by the term, then ‘globalisation’ has been happening for the last 50 years. Moreover, new technologies – long distance jets, satellites, IT, ﬁbre optic cables – have made international travel, media and ﬁnancial exchanges far easier, enabling dramatic increases in trafﬁc volumes. The key questions are threefold. First, are these economic and social processes linking nations since 1945 unprecedented? Second, are these processes developing at the expense of state and national governance, that is, are national economies dissolving into a global marketplace and relations between states becoming secondary to more complex interactions between a variety of economic, social and political agencies? Third, is international economic interconnectedness set to increase or decrease?