Edited by Hans-W. Micklitz and Takis Tridimas
The purpose of this chapter is to assess the international regulatory response to the 2008 Financial Panic and to suggest some reasons for an apparent disconnect between rhetoric and reality. We conclude that considering the gravity of the crisis and the promises made by politicians, the regulatory response has been less robust than promised. Many of the key pre-2008 regulatory approaches and even gatekeepers remain unaltered. Continuity rather than discontinuity better describes our financial architecture since the crisis. In our search for explanations, we observe that some of the most important financial individuals and institutions failed to see the crisis coming, believing that banks’ managers were sufficiently well informed and the banks sufficiently well capitalized to grasp and cope with their risks. We argue that major portions of our financial architecture – at least two that are considered major causes of the crisis – are still with us; indeed, may have gotten worse since the crisis. We suggest that the problems require a more serious, cross-border approach, but that this approach is still hindered by national political agendas and legal impediments. At the time of writing, 70 years after the Bretton Woods Conference, which tried to correct the financial failures of the first half of the 20th century, the worst crisis since the Great Depression has not led to a new consensus and greater sense of urgency about macroeconomic and regulatory policy; one that recognizes the need to find a new synthesis of national and international aspirations, for which Bretton Woods is rightly famous.
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