ABSTRACT
The global arrangements governing the activities of financial conglomerates remain largely unchallenged in the past 15 years. A long period of growth in the banking industry, the lack of clarity on the links between finance and the real economy and of visible losers, and the overall esoteric character of global finance have all been contributing factors. This chapter looks at the shifting governance framework in reaction to the global credit crisis and the developing regulatory responses at the global level. A core claim of the chapter is that in order to understand financial governance arrangements and their reform, we need a notion of a transnational policy community of expert actors, which, transcending public/private distinctions has been at the helm of policy processes. While much literature exists on the emergence of such policy communities and the legitimacy and efficiency issues associated with private authority and selfregulatory practices, we don’t yet know how policy communities react to a sustained and widespread crisis. This chapter provides an analysis of community reactions to the crisis at the official and private “best practice” levels, examining and challenging questions of the private capture of the policy process, of defining constituencies in global financial policy, and of the de-politicization of finance and the development of “appropriate” regulation.
