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The diplomacy of the financial crisis in context

Bayne, Nicholas (2011) The diplomacy of the financial crisis in context. Hague Journal of Diplomacy, 6 (1-2). pp. 187-201. ISSN 1871-1901

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Identification Number: 10.1163/187119111X557373


Until the 1980s, financial crises were caused by governments. But thereafter the private sector became the main culprit. The reforms introduced after the Asian crisis of the late 1990s were not properly implemented. Responsibility for financial stability became fragmented and the normal practices of economic diplomacy were abandoned. The crisis of 2007 thus caught governments unawares and obliged them to adopt extreme measures to avoid catastrophe. The decision-making that was associated with these measures gave more power to emerging markets through the G20. It ended the fragmentation of authority and achieved reasonable consistency of national, European and international financial reforms. It introduced stringent new rules in place of regulatory capture. But this progress was fragile: G7 members still tried to control the G20; the new reforms depended on national enforcement; and governments still needed too much from the banks to be able to discipline them completely. This crisis might be over, but it has left the seeds of the next one.

Item Type: Article
Official URL:
Additional Information: © 2011 Koninklijke Brill NV
Divisions: International Relations
Subjects: H Social Sciences > HG Finance
J Political Science > JZ International relations
Date Deposited: 20 Jul 2011 12:02
Last Modified: 20 Aug 2021 00:21

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