Reform of the G20 and the IMF’s International Monetary and Financial Committee (IMFC), premised on stronger and more representative corporate governance principles for both, could help avoid another global financial crisis, according to a new paper released by the Centre for International Governance Innovation (CIGI).
In CIGI Paper No. 42, Reforming the Global Architecture of Financial Regulation: The G20, the IMF and the FSB, Malcolm Knight says “global leaders must find a way to limit the risks in the international financial system, which requires a fundamental reform of the global economy architecture of regulation.”
Knight says “an appropriate framework for the governance of macroeconomic and financial policy cooperation … is a bimodal structure which includes both a restricted executive group of leaders who can implement major changes in the strategic policy direction to meet unforeseen developments and a universal, treaty-based official international financial institution that provides regular, consistent policy advice to its members.”
Knight says that “a more effective structure of governance over international economic policy coordination would be possible if the countries and jurisdictions whose leaders made up the restricted executive group were to be selected by a more systematic and widely accepted process than at present.”
An example of this, described by Knight, would be a merger between the IMF’s key governing body, the IMFC, and the G20, a self-appointed group whose country membership is similar to that of the IMFC.
For more information on Reforming the Global Architecture of Financial Regulation: The G20, the IMF and the FSB, including a free PDF download, visit: http://www.cigionline.org/publications/reforming-global-architecture-of-financial-regulation-g20-imf-and-fsb-0.
ABOUT THE AUTHORS:
Malcolm D. Knight is a CIGI distinguished fellow. He is also visiting professor of finance at the London School of Economics, a trustee of the International Valuation Standards Council and a director of the Global Risk Institute in Financial Services. From 2008 to 2011, he was vice chairman of Deutsche Bank Group, responsible for developing a globally coherent strategy and coordinating Deutsche Bank Group-wide issues on regulation, supervision and financial stability. At CIGI, Malcolm’s research focuses on the governance-related aspects of international financial regulation, standard-setting and international financial institutions. He served as general manager and chief executive officer of the Bank for International Settlements during 2003–2008. From 1999 to 2003, he was senior deputy governor of the Bank of Canada, where he was the bank’s chief operating officer and a member of the board of directors. From 1975 to 1999, Malcolm was with the IMF, where he held senior positions in both research and operations.
Kevin Dias, Communications Specialist, CIGI
Tel: 519.885.2444, ext. 7238, Email: [email protected]
The Centre for International Governance Innovation (CIGI) is an independent, non-partisan think tank on international governance. Led by experienced practitioners and distinguished academics, CIGI supports research, forms networks, advances policy debate and generates ideas for multilateral governance improvements. Conducting an active agenda of research, events and publications, CIGI’s interdisciplinary work includes collaboration with policy, business and academic communities around the world. CIGI was founded in 2001 by Jim Balsillie, then co-CEO of Research In Motion (BlackBerry), and collaborates with and gratefully acknowledges support from a number of strategic partners, in particular the Government of Canada and the Government of Ontario. For more information, please visit www.cigionline.org.