Financial Crisis And The Global Financial System

858 Words Oct 8th, 2015 4 Pages
Financial crises have plagued the international financial system for many decades. Indeed, they are becoming quite common lately. This quasi-permanent and problematic aspect of the global financial system can be highlighted by the problems regarding the sovereign debts of Asia, Africa, Central Europe, Latin America and the Middle East in the 80s, the 1987 stock market crash, the European foreign exchange crisis in 92-93, the bond market shock in 94, the financial problems that affected Asia, Brazil, Mexico and Russia in the mid-1990s , and more recently with the 2008 global financial collapse. This paper addresses the need for a globalized approach aimed at establishing a well-crafted legal framework capable of dealing with crises within the banking system, hence being able to protect the entire economy of the detrimental cascading effect that those instabilities can create. It compares the approach taken by the UK against the efforts being directed by the G-20 nations. It sheds light on the perspective that several important areas, such as systemic risk, consumer protection, market integrity, macro-prudential and micro-regulatory policies, as well as international competitive equality and shadow banking need to be scrutinized if we are to establish an effective international legal structure.
OVERVIEW OF THE CURRENT REGULATORY APPROACH
1) The UK Approach
During the last financial crisis, weaknesses were exposed within the UK’s system. The tripartite regulatory framework,…

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