Global Financial Architecture and Financial and Regulatory Infrastructure

Abstract

Some five years ago, Robert Rubin, the erstwhile US Treasury Secretary made a speech calling for measures to “strengthen the international financial architecture.” The metaphor he used was adopted by the academic and policy-making communities and has since survived in the academic writings on this issue as a part of accepted jargon. But it was inapt because global financial system was not quite an architect’s blueprint. If anything, it is an excellent example of what the Japanese call kaizen, meaning an incrementally evolving phenomenon, improving marginally but continuously, in stages, with time. Pressures from market participants and those from emerging market and Group of 7 (G-7) governments were responsible for this continual, marginal improvement in the global financial architecture.