ABSTRACT
This chapter identifies the consensus of the 1990s and its inconsistencies. The problematic economic consensus of the 1990s has not been displaced by something else, but persists, albeit in a modified form and has displayed a remarkable durability. Two fundamental organizing principles – sound money and open markets – defined the economic consensus of the 1990s and these two principles continue to dominate contemporary financial and monetary governance. The chapter discusses some of the traditional national differences that exist between the Group of Seven (G7) countries. Financial ideas therefore give expression to and produce specific sets of power relations. The G7 approach in the 1990s emphasized that exchange rates should reflect underlying fundamentals. As the financial sectors of other G7 states expand and develop, so too they develop a greater stake in the continuation and extension of the current financial system. Financial ideas clearly influence policy-makers, but as a stand-alone explanation of the politics of financial governance they are insufficient.
