China Research

Highlights

• Five years ago, the declarations of the G20 in landmark leaders’ summits in London and Pittsburgh listed specific commitments on financial regulatory reform. When measured against these declarations, as opposed to the surrounding rhetorical hype, most (though not all) commitments have been met to a substantial degree.
• However, the effectiveness of these reforms in making global finance more stable is not so far proven. This uncertainty on impact mirrors the absence of an analytical consensus on the crisis itself. In addition, unintended consequences of the reforms are appearing gradually, even as their initial implementation is still unfinished.
• At a broader level, the G20 has established neither an adequate institutional infrastructure nor a consistent policy vision for a globally integrated financial system. This shortcoming justifies increasing concerns about economically harmful market fragmentation. One key aim should be to make international regulatory bodies more representative of the rapidly-changing geography of global finance, not only in terms of their membership but also of their leadership and location.

¹ This Policy Contribution from September 2014 is an updated version of the author’s contribution to the 2014 China-US-Euro Economists Symposium “Reform: Challenges and Opportunities” jointly organized in Beijing on May 17-18, 2014, by Bruegel, the China Finance 40 Forum, and the Peterson Institute for International Economics.

Read the whole report The G-20 Financial Reform Agenda after Five Years

Nicolas Véron
Senior fellow at Bruegel, Brussels, Visiting fellow at the Peterson Institute for International Economics, Washington DC



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