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61. The 2014 Survey of Progress in International Economic Governance

Author:
Domenico Lombardi, Barry Carin, and David Kempthorne
Publication Date:
11-2014
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation
Abstract:
The annual CIGI Survey of Progress in International Economic Governance assesses progress in four dimensions of international economic governance: macroeconomic and financial cooperation; cooperation on financial regulation; cooperation on trade; and cooperation on climate change. Governance related to these dimensions is scored on the following progress scale: 0%-19% represents "major regression"; 20%-39% represents "some regression"; 40%-59% indicates "minimal progress"; 60%-79% characterizes progress; and 80%-100% represents "major progress." Recognizing the difficulty of making objective judgments given the complexity of the issues, the results are offered as a range of subjective opinions from CIGI experts with diverse backgrounds.
Topic:
Climate Change, Economics, International Cooperation, International Trade and Finance, and Governance
Political Geography:
United States and Europe

62. Comments on the September 29, 2014 FSB Consultative Document, "Cross-Border Recognition of Resolution Action"

Author:
Steven L. Schwarcz
Publication Date:
11-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The International Law Research Program (ILRP) of the Centre for International Governance Innovation (CIGI) welcomes the opportunity to comment on the Financial Stability Board's (FSB's) Consultative Document, “Cross-Border Recognition of Resolution Action” (hereafter referred to as the “Consultative Document”) that was released on September 29, 2014.
Topic:
International Trade and Finance, Financial Crisis, and Reform

63. The Environmental Risk Disclosure Regime: Navigating Complexity in Global Financial Markets

Author:
Jason Thistlethwaite
Publication Date:
10-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
In recent years, a plurality of different governance initiatives has emerged that are designed to expand the disclosure of environmental risk within financial markets. The emergence of these initiatives represents an important policy development, and it has the potential to reduce environmental risk within the financial sector by incentivizing investments in sustainable economic activity capable of long-term value creation. Unfortunately, environmental risk disclosure has yet to be assessed as a field of governance activity in addition to its potential effectiveness in improving disclosure within financial markets. This paper addresses this gap by describing environmental risk disclosure as a “regime complex” that is defined by a field of fragmented but related governance initiatives that lacks an overarching hierarchy. While this regime complex does reveal evidence for policy convergence among different initiatives, it lacks the enforcement necessary to produce a coherent and comparable disclosure and contributes to uncertainty within the financial sector over the impact of environmental risk. This uncertainty justifies an expanded role of international financial regulations in establishing a mandatory and harmonized disclosure standard that can be applied across different domestic jurisdictions.
Topic:
Environment, International Trade and Finance, and Markets
Political Geography:
United Nations

64. The State-owned Enterprises Issue in China's Prospective Trade Negotiations

Author:
John Whalley and Hejing Chen
Publication Date:
10-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
China, in the next few years, faces the prospect of major regional and bilateral trade negotiations possibly including the Trans-Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership with the Association of Southeast Asian Nations (ASEAN) and Japan, Korea, India, Australia and New Zealand and separate negotiations with India, Korea and Japan, potentially the United States and even possibly the European Union. A likely key element in such negotiations, and one already raised by the United States in the TPP negotiations, is that of trade arrangements involving state-owned enterprises (SOEs). China is viewed from outside as having a large SOE sector, and large SOEs are viewed as having a protected monopoly position in domestic Chinese markets.
Topic:
International Trade and Finance, Markets, and World Trade Organization
Political Geography:
Japan, China, Europe, India, Asia, Australia, and Korea

65. China in the G20 Summitry: Review and Decision-making Process

Author:
Alex He
Publication Date:
10-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
As the largest emerging economy, China believes that the Group of Twenty (G20), instead of the Group of Eight (G8), is the ideal platform for its participation in global governance. This paper examines the reasons why China joined the G20 rather than the G8, and then focuses on a detailed review of China's participation in G20 summits since the enhanced forum began in 2008. China took a very active and cooperative attitude in dealing with the global financial crisis in 2008-2009. The paper observes that China also insisted on its own agenda for reforms to the international monetary system, through reforms to the international financial institutions that manage it — in particular, raising the number of voting shares and the representation of developing countries at the IMF and the World Bank. Based on the reviews of China's performance in the G20 summits since 2008, the paper explores China's policy making through its participation in the G20, determining that it is shaped by several major economic departments in addition to the Ministry of Foreign Affairs, and coordinated by a vice premier responsible for economic and financial affairs. The paper concludes that China has gained immensely from its participation in the G20. Most importantly, China entered the centre stage of global economic governance through the G20, which allowed the country to demonstrate that it is a responsible great power, and communicate and maintain relations with other major powers. The main challenges China has faced since joining the G20, from the perspective of some Chinese scholars, are a lack of capacity for agenda setting and shaping initiatives, as well as inadequate communication and coordination among different government departments and between the Sherpa and financial tracks of the G20.
Topic:
Economics, International Political Economy, International Trade and Finance, International Monetary Fund, Global Recession, Financial Crisis, and World Bank
Political Geography:
China

66. The Effect of Index Futures Trading on Volatility: Three Markets for Chinese Stocks

Author:
Pierre Siklos, Martin T. Bohl, and Jeanne Diesteldorf
Publication Date:
09-2014
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation
Abstract:
This paper examines whether the introduction of Chinese stock index futures had an impact on the volatility of the underlying spot market. To this end, we estimate several Generalized Auto-Regressive Conditional Heteroscedasticity (GARCH) models and compare our findings for mainland China with Chinese index futures traded in Singapore and Hong Kong. Our results indicate that Chinese index futures decrease spot market volatility with all three spot markets considered. In contrast, we do not obtain the same results for the companion index futures markets in Hong Kong and Singapore. China's stock market is relatively young and largely dominated by private retail investors. Nevertheless, our evidence is favourable to the stabilization hypothesis usually confirmed in mature markets.
Topic:
Economics, International Trade and Finance, and Markets
Political Geography:
China and Singapore

67. China's Goals in the G20: Expectation, Strategy and Agenda

Author:
Alex He
Publication Date:
08-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The G20 has emerged as the lynchpin of China's involvement in global economic governance. It remains the only economic institutional setting where the country can operate on par with major Western powers. China has a strong interest in maintaining the status of the G20 as the premier forum for economic cooperation, and a vested interest in ensuring that the G20 does not degrade into yet another “talk shop” of multilateral diplomacy. However, the Chinese leadership's current approach to the G20 is not driven by a desire to position the country as a leading agenda setter. Instead, China's main policy priority is ensuring that the country is treated as an equal and respected partner. China recognizes that in many ways it is still in a comparatively weak position and does not have the institutional capabilities and talents needed to operate in global financial and economic institutions such as the G20.
Topic:
Economics, International Cooperation, and International Trade and Finance
Political Geography:
United States and China

68. Reforming the Global Architecture of Financial Regulation: The G20, the IMF and the FSB

Author:
Malcolm D. Knight
Publication Date:
09-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The global financial crisis that began in 2007 and deepened in 2008 exposed major weaknesses in financial and macroeconomic policy coordination, and profound flaws in financial risk management and regulation in a number of advanced countries. The severity of the crisis led global leaders to recognize that they must find a way to reform the global regulatory architecture to ensure that the financial system can absorb shocks while continuing to function efficiently.
Topic:
International Trade and Finance, Markets, International Monetary Fund, Financial Crisis, and Reform
Political Geography:
United States, United Kingdom, and Europe

69. Sovereign Debt Restructuring: Old Debates, New Challenges

Author:
James A. Haley
Publication Date:
05-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Ten years ago, in the wake of the Asian financial crisis and subsequent Argentine default, the international community debated how to best promote the timely, effective restructuring of sovereign debt. The debate then focused largely on the relative merits of a so-called statutory approach for sovereign restructurings, with features of domestic bankruptcy regimes, versus the voluntary use of contractual terms designed to facilitate restructurings. At the time, the statutory approach did not have the support necessary to move from proposal to policy and efforts to improve the framework of sovereign debt restructuring rested on the contractual approach.
Topic:
Economics, International Trade and Finance, and Financial Crisis
Political Geography:
Asia

70. IMF Lending Practices and Sovereign Debt Restructuring

Author:
Domenico Lombardi, James M. Boughton, and Skylar Brooks
Publication Date:
06-2014
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation
Abstract:
The IMF has struggled for decades to develop a set of lending practices that enable sovereign borrowers to resolve serious debt problems and restore economic growth, but also respect the right of private financial markets to enter into and enforce contractual obligations. The challenge has always been to operate under a well-defined set of principles while dealing with each situation in a way that takes account of relevant circumstances. Recently, the international financial crisis that began in 2008 and the subsequent European sovereign debt crisis have raised this challenge to new heights. In providing €30 billion to Greece — the largest financial package ever granted to a single country — the IMF invoked greater discretion in its lending decisions to counteract potential "systemic" crises. By doing so, it entered a program without a restructuring agreement.
Topic:
Debt, Economics, International Trade and Finance, International Monetary Fund, and Reform