New Challenges for Regulation of Global Financial Markets

  • Stephany Griffith-Jones


This chapter starts by describing recent trends in private financial markets, both globally and in developing countries. Then it analyses the structural changes that have occurred in global private financial markets — particularly resulting from deregulation and liberalisation — and attempts to evaluate their benefits and costs. Based on this analysis, it attempts to define the increase — and change in the nature of — risk, particularly of a systemic type. Special reference is made to risks as they affect LDCs. The chapter then reviews some of the main aspects of the supervisory and regulatory response to the changes in financial flows and, above all, to changes in perceived risk which they generate. Finally, conclusions are drawn and policy recommendations made, the latter going from those which are fairly widely accepted (but not implemented) to those which would be more innovative.


Financial Institution Systemic Risk Capital Requirement Market Risk Security Market 
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  1. 1.
    See, for example, World Bank, Global Economic Prospects and the Developing Countries, 1993, pp. 35–6.Google Scholar
  2. 4.
    For a detailed analysis of this trend, see R. Dale, International Banking Deregulation, the Great Banking Experiment (Oxford: Blackwell, 1992).Google Scholar
  3. 5.
    See, for example, BIS, op. cit.; also, R. O’Brien, Global Financial Integration: The End of Geography (London: Pinter, 1992).Google Scholar
  4. 7.
    See, for example, E. P. Davis, ‘The Structure, Regulation and Performance of Pension Funds in Nine Industrial Countries’, mimeo, Bank of England, 1992; also, Howell, M. and Cozzini, A. (1991) Games without Frontiers; Global Equity Markets in the 1990’s, (London: Salomon, 1991).Google Scholar
  5. 8.
    OECD, ‘Systemic Risks in Securities Markets’, Financial Market Trends, No. 49, June 1991, Paris.Google Scholar
  6. 9.
    E. Frydl, ‘The challenges of financial change’, Federal Reserve Bank of New York, Annual Report (1985).Google Scholar
  7. 17.
    R. Breuer, ‘Financial Integration — The End of Geography’, IOSCO XVII Annual Conference, London, October 1992.Google Scholar
  8. 19.
    J. Tobin, Tax the speculators’, The Financial Times, 22 December 1992.Google Scholar

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© North South Roundtable 1995

Authors and Affiliations

  • Stephany Griffith-Jones

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