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The New York Times reports that America is not favorably disposed towards a new oversight body that would regulate global financial markets and have cross-border authority. Dani Rodrik comments:
Here is the dilemma we cannot evade. If we want a truly global financial system, we need to acquiesce in a global regulator and a global lender of last resort. If we do not want the latter, we cannot have an integrated global financial system, so we must acquiesce in--gasp!--capital controls. Where do you stand?My hunch is a global regulatory authority is fairly inevitable. It's the same process that brought us the federal government. States could govern themselves when they were relatively autonomous. But as the railroads and communications technologies and various other technological advances transformed us into a national economy, we increasingly needed a national government. And though it seems natural in hindsight, that wasn't an easy transition -- no more intuitive then than a global regulatory authority is now.
