The interconnections and porosity between the different financial markets have been fostered by the liberalization of international capital movements and the development of new technologies that facilitate cross-border financial transactions. While the emergence of global financial markets has significant advantages as regards the diversification of risks and the generation of liquidity, it also involves important dangers of contagion of financial crisis and makes the prudential supervision of capital markets more difficult. The territorial limits of state sovereignty impose constraints on public authorities’ capacity to set up instruments that safeguard financial stability when they deal with financial firms that operate globally. Additionally, many authors denounce the deterioration of democracy when financial institutions take decisions that overrule national sovereignty in practice for the sake of financial stability.
The agora will explore the extent to which financial stability can be classified as a global public good. Topics that can be addressed in this agora include the following: Taking into account the multiple damages generated by the spill-over effects of financial crises (on human rights, development cooperation or democracy), should we consider financial stability as a global public good? Have we learnt from the 2008 financial crisis that there is a need to strengthen the international tools to promote financial stability and prevent beggar-thy- neighbour policies and free-riding? What are the mechanisms to organize prudent financial regulation and supervision from an international law perspective? Is the soft governance of international financial markets through non-binding texts and technical bodies such as the Financial Stability Board sufficiently democratic and accountable, or are there other better alternatives? Is there a global legal concept of financial stability that facilitates international cooperation towards this common goal or do diverging national interests make its qualification as a global common illusory?
Paolo Sestito (Banca d’Italia)
Maziar Peihani (Centre for International Governance Innovation, Vancouver) “Ending the Too-Big-To-Fail Conundrum: An Elusive Objective for International Law?”
Lucía Satragno (World Trade Institute, Bern) “International Monetary Stability as a Common Concern of Humankind”
Matthias Goldmann (Goethe Universität, Frankfurt am Main) “The Complicity of International Law in Global Financial Instability”