ABSTRACT
The prolonged systemic crisis in international fi nancial markets commencing in 2007/2008 was also a crisis in corporate governance and regulation. The most severe fi nancial disaster since the Great Depression of the 1930s exposed the dangers of unregulated fi nancial markets and nominal corporate governance. The crisis originated in Wall Street where de-regulation unleashed highly incentivized investment banks to fl ood world markets with toxic fi nancial products. As a stunning series of banks and investment companies collapsed in the United States and then in Europe, a frightening dimension of the global economy became fully apparent: a new world disorder of violently volatile markets and deep fi nancial insecurity. Advocating systemic change President Nicolas Sarkozy of France proclaimed, “The world came within a whisker of catastrophe. We can’t run the risk of it happening again. Self-regulation as a way of solving all problems is fi nished. Laissez-faire is fi nished. The all-powerful market that always knows best is fi nished” (Washington Post September 28, 2008), as if presidential rhetoric alone could sweep away an enveloping, fi nancially-driven political economy.
