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Rating agencies were in the spotlight again as a result of the US subprime crisis that started during the summer of 2007 and that highlighted the systemic relevance of the agencies in financial markets. Deficiencies were detected in three main areas: agencies were sometimes affected by conflicts of interest, were not always vigilant on the quality of the rating methodologies, and there was lack of adequate public disclosure, specially on critical model assumptions and on the characteristics and limitations of ratings. The limited scope of competition among rating agencies contributed to accentuate those weaknesses. Consensus emerged in the international regulatory community on the need to address these failures through the establishment of public oversight and regulation of rating agencies and by diminishing the excessive reliance of investors and regulations on ratings. The chapter describes the main initiatives undertaken by global organizations as a result of such international agreement: G-20, Financial Stability Board, and IOSCO.

The current global financial crisis, being mainly the result of speculative lending and investment in major international finance centres of the North, is affecting all countries and all people worldwide. The crisis calls for immediate policy reaction in order to stabilize financial markets and international capital flow. In order to improve economic global governance various proposals have been put forward in the United Nations (UN), the G-20, and the Bretton Woods Institutions (BWIs). Whether the current reform initiatives will achieve practical results is an open question: although proposals for reform (such as the Financing for Development Initiative and the Sovereign Debt Restructuring Mechanism) had already been made after a series of regional crises in the 1990s, no significant result has yet been reached.

This concluding chapter presents a brief overview of some emerging challenges to fiscal and financial sector policies. The links between fiscal management, financial regulation, and conduct of monetary policy are closer than were perceived before the global crisis. There is now increasing awareness of the capacity of the financial sector to undermine effectiveness of policies relating to both taxation and regulation at national level. The fiscal issues relating to exchange of information on taxation and the cross-border tax avoidance mechanisms discussed in G-20 will also influence the future of global finance while simultaneously impacting the fiscal measures. In the global financial markets, interest rates on government securities of longer maturity continue to be low. Going forward, some elements of globalization of fiscal management that could match globalization of finance and its regulation may be essential.

Argues that emerging markets have emerged; the traditional distinctions between emerging and developed markets—the size of their economies, the size of their financial markets, corporate governance, government policies, even growth—have blurred or disappeared; the one surviving distinction between them is the price you pay for growth.

This chapter aims to contribute to a better understanding of the following two-fold question: To what extent can a contested practice like the maintenance of an undervalued real exchange rate be dealt with effectively under existing international law? Intrinsically related, which are the key aspects on which the IMF’s code of conduct would require reform in order to tackle contemporary challenges to the stability of the international monetary system, such as global current account imbalances? After assessing whether the code of conduct in IMF Article IV:1 constitutes an effective framework for securing systemic stability, this chapter assesses the extent to which WTO rules might constitute an alternative for tackling an undervalued real exchange rate as a prohibited export subsidy. Finally, the chapter looks at overarching conceptual issues and at the G-20’s ongoing efforts to reduce global current account imbalances as one of the underlying key challenges to systemic stability.

Like earlier crises, the Global Financial Crisis has triggered a restructuring of the international financial architecture. The G-20 was revived to provide a forum for the leaders of the world’s largest economies to agree on reforms intended to promote global economic and financial stability. The Financial Stability Forum was re-established with increased responsibilities and an extended membership as the Financial Stability Board. The IMF increased its efforts to assess the financial sectors of its members and of their compliance with financial standards and codes. Finally, in order to increase the IMF’s legitimacy and effectiveness, the IMF’s membership has undertaken the largest-ever overhaul of the IMF’s governance structure. This chapter takes a succinct look at the key aspects of these reform avenues and assesses whether the experience of the Global Financial Crisis has prompted states to substantially change the way they exercise their sovereign powers in monetary and financial matters.

This concluding chapter identifies the four major causes of the growth and origin of judicial review in the G-20 common law countries and in Israel. First, the need for a federalism umpire, and occasionally a separation of powers umpire, played a major role in the development of judicial review of the constitutionality of legislation in the United States, in Canada, in Australia, in India, and most recently in the United Kingdom. Second, there is a rights from wrongs phenomenon at work in the growth of judicial review in the United States, after the Civil War; in Canada, with the 1982 adoption of the Canadian Charter of Rights and Freedoms; in India, after the Indira Gandhi State of Emergency led to a massive trampling on human rights; in Israel, after the Holocaust; in South Africa, after racist apartheid misrule; and in the United Kingdom, after that country accumulated an embarrassing record before the European Court of Human Rights prior to 1998. This proves that judicial review of the constitutionality of legislation often occurs in response to a deprivation of human rights. Third, the seven common law countries all borrowed a lot from one another, and from civil law countries, in writing their constitutions. Fourth, and finally, the common law countries all create multiple democratic institutions or political parties, which renders any political attempt to strike back at the Supreme Court impossible to maintain.

There is no global government, but a growing myriad of global governance platforms. Some are intergovernmental (United Nations and affiliated agencies, differing ‘clubs’ of nations such as the G-7 or G-20); others are multi-stakeholder, drawing together governments, private sector interests, civil society organizations, philanthropists, and academics or other prominent individuals. The plurality and questionable democratic legitimacy of many of these governance platforms is problematic in terms of who has authority or influence over global norms and rules affecting the social determinants of health. Four intergovernmental organizations are profiled for the distinct roles they play in global health governance: the World Health Organization (WHO) (nominally the lead global health governance body), the World Bank (whose financial resources eclipse those of the WHO), United Nations Children’s Fund (with a particular remit to improve children’s health), and the International Labour Organization (a unique tripartite body advocating for global social protection floors).

The global financial crisis has brought about a dramatic change in the magnitudes of public debt, profiles of creditors and debtors, and maturity structures. The management of fiscal policy and large public debt in advanced economies in the context of the crisis has influenced monetary management in several ways. Some of the lessons to be drawn from the impact of the crisis include the role of financial sector in public debt, the changing role of multilateral institutions, the criticality of residence of holders of debt securities as well as currency of denomination, and the somewhat porous boundary of fiscal obligations. The recent improvements in global financial architecture do not significantly improve the global environment for management of public debt. The outlook for global public debt is different from the past, requiring close coordination between fiscal and monetary policies as well as regulation of financial sector.

The global financial crisis resulted in renewal of interest in taxation of financial sector. The main focus of such interest was to tax financial sector to defray the fiscal costs of bailout of finance sector in the past or likely to be incurred in future. There is a debate on the extent of under-taxation of financial sector and distortions caused in the financial sector by the tax system. In this context, there is renewed interest in Tobin tax. This interest was, perhaps, in the context of public outcry in advanced economies. To achieve regulatory objectives It is possible to envisage taxes that dissuade excess leverage. However, there are elements of current tax system which may contribute to excessive financialisation, including volatility in financial markets. The chapter, thus, argues for a need to consider regulation and taxation in an integrated manner for policy purposes.

In the backdrop of economic trends during 2000–6, this chapter gives a synoptic account of the global economic developments during 2007–13. This seven-year period 2007–13 witnessed various crises—the sub-prime crisis in the US, leading to global financial crisis, finally culminating in the great recession of 2009. Countries all across the world undertook simultaneously coordinated monetary and fiscal stimulus, and growth resurfaced in 2010 led by a number of countries in developing Asia (primarily China). But this resurgence of growth was transitory, uneven, and fragile and the recovery was punctured subsequently in 2011–12 with the emergence of euro area debt crisis. A number of reasons may be identified behind the emergence of the euro area crisis, such as unsustainable fiscal position and high current account deficit in some of these economies. There are indications that 2014 will witness some improvements in the euro area.

This chapter examines whether the justificatory theory of international law provides guidance to regulators. It considers how the focus on shared expectations rather than formal laws enables the theory to accommodate important methods of stabilizing international activities in the absence of international laws. In particular, it examines the global recession of 2008, and contrasts the regulatory failures in 2008 with the ongoing efforts of the Financial Stability Board convened by the G-20's central bank governors.