Abstract
The debate on the redesign of international financial architecture has not paid sufficient attention to the manner in which decisions on some international capital movements are made. For various reasons, some of which may be justified given the incentives and the imperfections in the market, investors have a tendency to transfer some costs of their actions to the public, herd behind each other, ignore long-term risks of certain investments and make decisions without necessary search and analysis of relevant information. Given the consequences of these decisions, new rules for international financial flows must take into account these behavioral considerations and not assume that markets work perfectly.
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Jain, A.K. (2000). Governance of Global Financial Markets: Risk of Hubris. In: Frenkel, M., Hommel, U., Rudolf, M. (eds) Risk Management. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-04008-9_13
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DOI: https://doi.org/10.1007/978-3-662-04008-9_13
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