Global Finance: New Thinking on Regulating Speculative Capital Markets

In this important policy- and campaign-relevant volume, economists, intellectuals and NGO leaders from both North and South confront what has now become the central issue of the new globalized world economy. Ever since the Asian crisis of 1997 threatened a chain-reaction of economic destabilisation, governments, the IMF, even the G7, and even George Soros, have concluded that something needs to be done. This volume examines the range of different ideas and approaches they have come up with. Among the issues examined are: * How do we go about renewing the process of governance of the global economy? * Can the IMF be reformed? * Do we need a new World Financial Authority? * Is there a case for capital controls? * Could an international bankruptcy procedure be set up for countries, emulating the US's Chapter 11 for companies? * Is the Tobin Tax on foreign currency transactions part of the solution? * What effective steps need to be taken in relation to the most deeply indebted countries? Contributors include Walden Bello, John Cavanagh, Susan George, Carlos Fortin, Martin Khor, Rodney Schmidt and others. They set their suggestions in the context of understanding what has happened during the past two decades of neo-liberalism's hegemonic position over economic thinking and policy. And they put up for discussion a fundamental recasting of economic institutions and strategies on the basis of democratically controlled, environmentally compatible alternative lines. As the political momentum for serious institutional reform at the global level mounts, the ideas in this book will increasingly be on the international policy agenda.

Table of Contents:
Introduction: Walden Bello and Nicola Bullard 1. Notes on the Ascendancy and Regulation of Speculative Capital - Walden Bello, Kamal Malhotra, Nicola Bullard and Marco Mezzera Finance Capital Unbound Key Features of Finance Capitalism Globalization's Volatile Engine Finance Capital and the South Speculative Crisis: Two Case Studies Mexico: A Supply-Driven Crisis Southeast Asia: Volatility Sinks a Development Model The Three Schools of Global Financial Reform 'It's the Wiring, not the Architecture' 'Back to the Bretton Woods System' 'It's the Development Model, Stupid!' De-globalizing the Domestic Economy 2. A Short History of Neo-Liberalism: 20 Years of Elite Economics and Emerging Oppportunities for Structural Change - Susan George 3. Practical Proposals: THe UN System and Financial Regulation - Carlos Fortin 4. Renewing the Governance of the Global Economy - Kamal Malhotra Rethinking Sustainable Human and Social Development The National Level The Regional Level The Global Level Who's Wagging Whom? 5. Their Reforms or Ours: The Balance of Forces and Economic Analysis that Inform a New Global Financial Architecture - Patrick Bond The Array of Forces Contesting Global Finance Scales of Political Reform 6. The Death of the Washington Consensus? - Robin Broad and John Cavanagh The Reign of the Washington Consensus Attack on Consensus: The Discrediting of Free Trade Cracks in the Consensus: Hot Money and the Wall Street-Treasury Complex Further Openings in the Consensus A New Development Debate 7. Can the IMF be Reformed? - Richard Leaver Avoiding the Void Questions of Power ? ? and Purpose The End of the Game? 8. Can Global Finance be Regulated? - Manfred Bienefeld Can and Should Global Finance be Regulated? The Standard Mainstream Argument for Financial Deregulation The Problem of Regulating Finance in an Increasingly Global World Factors Making National Financial Regulation More or Less Difficult Conclusions 9. Putting People before Profits: Proposals for the Regulation of Foreign Investment - Jessica Woodroffe The Problem Getting It Right An International Investment Agreement Enabling Governments to Attract Quality Investment Maintaining Standards Beyond the Core Standards The Enforcer A Core Standards Commission Balancing National Sovereignty and Individual Rights Complementary International Action National Action Annex: The Core Standards 10. Why Capital Controls and International Debt Restructuring Mechanisms are Necessary to Prevent and Manage Crises - Martin Khor A Brief Analysis of the Malaysian Measures Some Responses to the Malaysian Move Krugman, Breaking the Academic Taboo on Capital Controls The Turning Tide Against Free-Market Orthodoxy Using Capital Controls to Prevent and Manage Financial Crises Orderly Debt Workout for Debt-Crisis Countries Time for Regulation 11. The Debate about Capital Controls: Issues in Capital Account Convertibility - Sumangala Damodaram Some Essential Concepts The Pros and Cons of Capital Account Convertibility Current Issues in Capital Controls and Capital Account Convertibility Conclusion 12. China: The Case for Capital Controls - Yu Yongding Capital Controls in China The Evasion of Capital Controls China's Efforts in Maintaining the Balance of International Payments Final Observations 13. An International Chapter 11 Bankruptcy Procedure and Special Drawing Rights - Zhiyan Cui The First Implication Credit Rationing Equity Rationing Multiplier Effect and Recession The Second Implication SDR as a Crucial Device in International Chapter 11 14. The Tobin Tax and the Regulation of Capital Movements - Bruno Jetin and Suzanne de Brunhoff The Objective, Usefulness, and Limitations of the Tobin Tax Three Additional Benefits of the Tobin Tax The Limitations of the Tobin Tax What are the Fundamental Objections to the Tobin Tax? Is the Tobin Tax Feasible? Conclusion 15. A Feasible Foreign Exchange Transactions Tax - Rodney Schmidt Overview of the Argument A Tax on Interbank Foreign Exchange Transactions Settling Interbank Foreign Exchange Transactions Domestic Payment Systems Netting Systems Contracts for Differences Requirements of a Feasible Transactions Tax Identifying Foreign Exchange Transactions Enforcing Tobin's Tax in Offshore Netting Systems Taxing Foreign Exchange Derivatives How to Implement a Foreign Exchange Transactions Tax Notes to the Figures Index Tables and Figures 5.1 Five Reactions to the Global Crisis (126) 12.1: China's Balance of Payments, 1994-97 12.2: The Major Forms of Evading the Capital Controls of the Government 15.1: Settling a Foreign Exchange Trade in Domestic Payments Systems

About the Author :
Walden Bello is director of Focus on the Global South, heading up its Global and Regional Paradigms programme. He is professor of Sociology and Public Administration at the University of the Philippines in Manila. Nicola Bullard is the deputy director of Focus on the Global South. She has worked extensively with non-government organisations and trade unions. Kamal Malhotra was co-director of Focus on the Global South from 1994-99 and is currently a senior advisor in the Social Policy and Poverty Eradication Division of the United Nations Development Program. Walden Bello is director of Focus on the Global South, heading up its Global and Regional Paradigms programme. He is professor of Sociology and Public Administration at the University of the Philippines in Manila. Nicola Bullard is the deputy director of Focus on the Global South. She has worked extensively with non-government organisations and trade unions. Kamal Malhotra was co-director of Focus on the Global South from 1994-99 and is currently a senior advisor in the Social Policy and Poverty Eradication Division of the United Nations Development Program.