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Neoliberalism and the new international financial architecture

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  • Aaron Major

Abstract

This paper theorizes about the new international financial architecture as a manifestation of the ‘second face of neoliberalism’ – financial market reregulation through technocratic obfuscation and insularity from democratic political pressure. Using a more expansive definition of the new international financial architecture, one that includes the institutional nexus of international monetary management along with the rules and regulatory bodies governing capital, this argument is developed through an analysis of the origins and functions of two institutions comprising the new international financial architecture – the Basel Capital Accord and the diffusion of inflation targeting regimes across central banks. This paper excavates the neoliberal logic inscribed in these institutions and further shows how these new forms of institutional logic contributed to the financial crisis of 2008 by putting in place a set of opportunities and constraints that led to rapid growth in the market for asset-backed securities. The implications of this analysis for the future of regulatory reform are discussed, with particular attention paid to the question of what role central banks should play in this process.

Suggested Citation

  • Aaron Major, 2012. "Neoliberalism and the new international financial architecture," Review of International Political Economy, Taylor & Francis Journals, vol. 19(4), pages 536-561.
    • Handle: RePEc:taf:rripxx:v:19:y:2012:i:4:p:536-561
    DOI: 10.1080/09692290.2011.603663
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    Citations

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    Cited by:

    1. Thomas Goda & Özlem Onaran & Engelbert Stockhammer, 2017. "Income Inequality and Wealth Concentration in the Recent Crisis," Development and Change, International Institute of Social Studies, vol. 48(1), pages 3-27, January.
    2. Beibei Zhang, 2020. "Social policies, financial markets and the multi-scalar governance of affordable housing in Toronto," Urban Studies, Urban Studies Journal Limited, vol. 57(13), pages 2628-2645, October.
    3. Goda, Thomas & Onaran, Özlem & Stockhammer, Engelbert, 2014. "A case for redistribution? income inequality and wealth concentration in the recent crisis," Greenwich Papers in Political Economy 14056, University of Greenwich, Greenwich Political Economy Research Centre.
    4. McCarthy, Michael A., 2014. "Neoliberalism without neoliberals: Evidence from the rise of 401(k) retirement plans," MPIfG Discussion Paper 14/12, Max Planck Institute for the Study of Societies.
    5. Michaelides, Panayotis G. & Milios, John G. & Konstantakis, Konstantinos N. & Tarnaras, Panayiotis, 2015. "Quantity-of-money fluctuations and economic instability: empirical evidence for the USA (1958–2006)," MPRA Paper 90145, University Library of Munich, Germany.
    6. Thomas Goda, 2017. "A comparative review of the role of income inequality in economic crisis theories and its contribution to the financial crisis of 2007-2009," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 9(1), pages 151-174, February.
    7. Albertina Nania, 2022. "Redesigning the International Monetary System. Intellectual Influences and the Return of the Special Drawing Rights: An Open Issue," HISTORY OF ECONOMIC THOUGHT AND POLICY, FrancoAngeli Editore, vol. 2022(2), pages 123-129.
    8. Jan Libich & Liam Lenten, 2022. "Hero or villain? The financial system in the 21st century," Journal of Economic Surveys, Wiley Blackwell, vol. 36(1), pages 3-40, February.
    9. Jacint Jordana, 2017. "Transgovernmental Networks as Regulatory Intermediaries," The ANNALS of the American Academy of Political and Social Science, , vol. 670(1), pages 245-262, March.
    10. Petry, Johannes, 2024. "Exchanges: infrastructures, power and the differential organisation of capital markets," OSF Preprints 5gwte, Center for Open Science.
    11. Dawa Sherpa, 2013. "Critical Evaluation of Basel III as Prudential Regulation and its Consequences in Developing Countries’ Credit Needs," EY International Congress on Economics I (EYC2013), October 24-25, 2013, Ankara, Turkey 253, Ekonomik Yaklasim Association.

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