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Assessing Changes in the Global Financial Architecture from an Emerging Market Perspective

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  • Ashima Goyal

Abstract

The article assesses changes in the global financial architecture and related global governance. Despite useful reforms lacunae remain. Analysis of financial regulations and measures to address global imbalances show serious weaknesses in addressing risks from shadow banking and large banks that are responsible for volatile capital flows to emerging markets (EMs). The underlying philosophy that intervention and controls distort markets and manipulate currencies weakens the toolbox available to EMs to deal with volatile capital flows. The use of quantitative easing and deficits are regarded as a valid response to domestic conditions in advanced economies, and their effect on commodity price inflation hitting EMs not acknowledged. Despite greater representation of EMs in the G-20 adjustment continues to be asymmetric. This harms global stability and recovery. Universal adoption of some basic minimal measures can close arbitrage gaps and resolve many problems.

Suggested Citation

  • Ashima Goyal, 2013. "Assessing Changes in the Global Financial Architecture from an Emerging Market Perspective," Foreign Trade Review, , vol. 48(4), pages 461-480, November.
    • Handle: RePEc:sae:fortra:v:48:y:2013:i:4:p:461-480
    DOI: 10.1177/0015732513504711
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    References listed on IDEAS

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    More about this item

    Keywords

    Global financial architecture; regulations; imbalances; currency wars; international governance;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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