Rethinking Bretton Woods | Mon, May 14, 2012
SOMO researcher Myriam Vander Stichele addresses the need to face the legacy of treaties of the 20th century on liberalization of trade and investment in the light of the regulatory paradigm of financial services that is emerging in the 21st century. This presentation was delivered at the Global Services Forum held by UNCTAD in April 2012 in Doha, Qatar, in the occasion of UNCTAD XIII Conference.
It is now recognized that an important cause of the financial crisis was the lack of regulation and supervision at national, regional and international level while the financial sector was liberalized and expanded rapidly. Indeed, liberalization of financial services under GATS and other free trade agreements were agreed without guarantee of sufficient cross border regulation and supervision or control of capital flows.
The financial crisis has reversed this approach and many countries as well as the EU have embarked on reforming the financial sector and restricting financial services and improving supervision.
However, the global financial system is now faced with the legacy of international, regional and bilateral binding and enforceable treaties that provide frameworks and rules that liberalize trade and investment in financial services but incorporate “light touch regulation” and de-regulation or self-regulation by the sector.