Search

Begin New Search Topic Markets Publishing Institution Centre for International Governance Innovation

1. Beyond International Standards: Mapping the Future of Capital Markets Regulation

Author:
Cally Jordan
Publication Date:
09-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
As a response to multiple financial shocks, international standards have disappointed. Consensus seeking has stifled innovation, perpetuating outdated regulatory concepts at a time of rapid market change. Markets are complex and idiosyncratic; they may not be receptive to efforts toward producing regulatory harmonization and convergence. Alternatives to international standard setting should be explored. Possibilities include fora for experimentation in capital markets regulation, the creation of a set of variegated model capital markets laws and a “restatement”-like treatise.
Topic:
Markets, Financial Crisis, Regulation, and Capitalism
Political Geography:
Global Focus

2. Assessing the Governance Practices of Sustainability Reporting

Author:
Jason Thistlethwaite and Melissa Menzies
Publication Date:
01-2016
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation
Abstract:
To promote climate change risk mitigation in financial markets, the Financial Stability Board recently proposed the creation of a Climate Disclosure Task Force, coordinated through the G20, to develop standards for companies to disclose their exposure to climate change risks. With more than 400 existing disclosure schemes, this task will be challenging. This brief identifies the key categories of governance practices that must be addressed, how these divergent practices challenge end-users, and how the establishment of criteria that define effective and efficient reporting is a critical first step for the Climate Disclosure Task Force.
Topic:
Climate Change, Economics, Markets, and Financial Crisis
Political Geography:
Global Focus

3. A Deeper Look at China’s “Going Out” Policy

Author:
Hongying Wang
Publication Date:
03-2016
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
In recent years, the world has seen rapid growth in China’s financial reach beyond its borders. Following the announcement of a “going out” strategy at the turn of the century, many Chinese enterprises have ventured to invest and operate abroad. After three decades as primarily a recipient of foreign direct investment (FDI), China has now emerged as a major FDI-originating country as well. Much of China’s foreign aid is closely entangled with its outgoing FDI, and it has also been rising. Since 2013, the Chinese government has been pushing for a new One Belt, One Road (OBOR) initiative, aiming to connect China with countries along the ancient Silk Road and a new Maritime Silk Road via infrastructure investment. In addition, since 2009, China has actively promoted the internationalization of its currency, the renminbi (RMB). There has been a great deal of anxiety about the motivations behind China’s going out policy and its possible international consequences. Many view it as an expression of China’s international ambition and a strategy that threatens the existing international order; however, that is not the whole story. An equally important but often less understood issue is the role of China’s domestic politics and political economy in shaping its new activism in foreign financial policy. Moreover, it is unclear how successful the going out policy is. The complexity of China’s going out policy was the topic for a recent round table discussion hosted by the Centre for International Governance Innovation and the Foreign Policy Institute at the School of Advanced International Studies of Johns Hopkins University in Washington, DC.[1] Participants discussed a number of issues around two broad themes: the impact of domestic political economy on China’s foreign economic policy and the challenges for China’s external financial strategy — in particular, its OBOR initiative.
Topic:
Markets, Political Economy, Monetary Policy, Infrastructure, Foreign Direct Investment, and Financial Markets
Political Geography:
China

4. Canadian Trade Negotiations in an Era of Deep Integration

Author:
Patricia Goff
Publication Date:
02-2016
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) is noteworthy for the expanded role that Canadian provinces and territories played in the negotiation. In this particular instance, these sub-federal actors had a seat at the negotiating table at the request of their European Union partners. However, this paper argues that CETA is exceptional in this regard. Despite the fact that regional trade agreements increasingly contain provisions that relate to areas of provincial and territorial jurisdiction, each trade negotiation is distinct. The CETA experience should not create the expectation that provinces and territories will always participate in the same capacity. Any enhanced role will depend on the federal government’s strategic assessment of any specific trade negotiation.
Topic:
International Trade and Finance, Markets, Political Economy, Treaties and Agreements, and Regulation
Political Geography:
Canada and European Union

5. Assessing the Effects of the Multifibre Arrangement after Its Termination

Author:
John Whalley and Daqing Yao
Publication Date:
03-2016
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The effects of the termination of the Multifibre Arrangement (MFA) on the trade of clothing and textiles are assessed in this paper, based on world trade date and US trade data. The findings from the data analyzed indicate that the effects of the termination of the MFA on the clothing trade was more significant for clothing than for the textiles trade. With the end of the MFA, the freer trade in these sectors shed light on other sectors that are still protected under trade agreements.
Topic:
International Trade and Finance, Markets, Treaties and Agreements, and Regulation
Political Geography:
Global Focus

6. CETA and Financial Services: What to Expect?

Author:
Patrick Leblond
Publication Date:
02-2016
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) is possibly the most ambitious regional free trade agreement that Canada and the European Union have negotiated so far. One of its main components is a chapter that seeks to liberalize trade and investment in financial services between Canada and the European Union, while ensuring that markets and their agents will be properly regulated and protected through prudential regulation. However, this chapter is unlikely to have a significant impact on the financial services sector in Canada and the European Union in the short and medium term. Although some observers fear that CETA might undermine the high quality of financial regulations in Canada or the European Union, this paper’s analysis demonstrates that such concerns are unfounded.
Topic:
International Trade and Finance, Markets, Treaties and Agreements, and Regulation
Political Geography:
Canada and European Union

7. The Impact of Sustainability Codes of Conduct in the Financial Sector

Publication Date:
02-2016
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper analyzes the impact of four major financial sector sustainability codes of conduct, the UN Environmental Programme Finance Initiative, the UN Principles for Responsible Investment, the Equator Principles and the Global Alliance for Banking on Values with regard to their impact on the sustainability of their members. The codes of conduct focus on the integration of environmental, social and governance criteria into financial decision making in lending, investment, asset management and project finance. corporate sustainability voluntary codes of conduct have a positive impact on their members. The effectiveness, however, depends on the quality and content of a code, as well as on implementation and compliance mechanisms.
Topic:
Economics, International Trade and Finance, Markets, United Nations, and Ethics
Political Geography:
Global Focus

8. Capital Flows and Spillovers

Author:
Şebnem Kalemli-Özcan
Publication Date:
03-2015
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper shows that debt flows have contractionary effects on emerging markets' output, while equity flows have expansionary effects. Such correlations can be driven by counter-cyclical debt flows and pro-cyclical equity flows, or by debt flows that lead to an appreciation and hurt exports, and by equity flows that improve the productivity of the real economy, broadly defined. It focuses on business cycle frequencies and the effect of global risk appetite in driving capital flows into emerging markets. A positive initial impact of debt flows on output is followed by a negative impact. Equity flows have a positive impact on output initially, and thereafter. Foreign direct investment (FDI) inflows have a positive effect on output only after a two-year lag, and if this period coincides with increased global uncertainty, the effect on output reverses, but the total effect stays positive. This result also holds for equity flows, suggesting that during increased periods of uncertainty, private investors leave emerging markets. Quantitative impacts are not large except in the case of FDI flows.
Topic:
Markets

9. Central Banks Can and Should Do Their Part in Funding Sustainability

Author:
Andrew Sheng
Publication Date:
06-2015
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Central banks, when purchasing financial assets, should consider selecting assets that will promote sustainability, including climate change mitigation and adaptation. During the 2008 financial crisis, central banks deployed unconventional means to rescue failing banks and insulate economies from depression. Their asset purchases have had strong social impacts, but traditionally, central banks have not explicitly factored social objectives into their decisions or evaluated their impacts beyond the narrow monetary domain. Social impact investing is consistent with a central bank’s mandate to maintain price stability, but those not yet ready to move in this direction should at least incentivize bankers and asset managers to invest in, or lend to, climate mitigation activities and low-emission growth, as well as support a financial transaction tax.
Topic:
Climate Change, Energy Policy, Environment, Markets, Monetary Policy, and Financial Markets
Political Geography:
Global Focus

10. Submission to Ontario’s Climate Change Discussion Paper 2015

Author:
Oonagh Fitzgerald, Karima Bawa, David Estrin, Kent Howe, Dean MacDougall, Myra J. Tawfik, Basil Ugochukwu, and Bassem Awad
Publication Date:
04-2015
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) congratulates the Province of Ontario’s Ministry of the Environment and Climate Change for launching a province-wide public consultation process — Ontario’s Climate Change Discussion Paper 2015 — in relation to an issue of global importance and urgency for Ontarians and Canadians alike, at a time when nations need to galvanize their subnationals, climate experts, civil society, business and industry to commit to intended nationally determined contributions (INDCs) to reduce carbon emissions and mitigate the effects of climate change. The CIGI ILRP is optimistic that through this provincial consultation process and implementation of the best ideas it generates, as well as through Ontario’s initiatives undertaken in collaboration with other provinces and foreign subnationals, Canadians will be able to prove to the world our commitment to make a meaningful contribution to achieving an ambitious, verifiable and enforceable international agreement on climate change in December 2015 in Paris. By proactively addressing climate change now, the Government of Ontario positions this province, its citizens, universities and businesses to be innovators for sustainable prosperity rather than victims of global environmental and economic crisis.
Topic:
Civil Society, Climate Change, Economics, Energy Policy, Environment, Markets, and Natural Resources
Political Geography:
Canada

11. A Failure to Cooperate? Raising the Risks and Challenges of Exiting Unconventional Monetary Policies

Author:
Domenico Lombardi, Pierre Siklos, and Samantha St. Amand
Publication Date:
03-2014
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation
Abstract:
Central banks (and policy makers more generally) should seek a global consensus before implementing policies that may have global repercussions. The global economy can only become more resilient to shocks when there is greater central bank cooperation. The G20 is a natural venue to promote cooperation and to help the global economy return to stronger economic growth, but other forums may also be appropriate. The maintenance of financial stability is a common resource and should be treated as such. Excessive reliance on sovereignty is counterproductive and contains the seeds of the next crisis.
Topic:
Economics, International Cooperation, International Trade and Finance, Markets, and Financial Crisis

12. 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

13. 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

14. 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

15. 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

16. A Markov Switching Approach to Herding

Author:
Pierre Siklos, Martin T. Bohl, and Arne C. Klein
Publication Date:
12-2013
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Existing models of market herding suffer from several drawbacks. Measures that assume herd behaviour is constant over time or independent of the economy are not only economically unreasonable, but describe the data poorly. First, if returns are stationary, then a two-regime model is required to describe the data. Second, existing models of time-varying herding cannot be estimated from daily or weekly data, and are unable to accommodate factors that explain changes in this behaviour. To overcome these deficiencies, this paper proposes a Markov switching herding model. By means of time-varying transition probabilities, the model is able to link variations in herding behaviour to proxies for sentiment or the macroeconomic environment. The evidence for the US stock market reveals that during periods of high volatility, investors disproportionately rely on fundamentals rather than on market consensus.
Topic:
Economics, Globalization, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
United States and Canada

17. Forging a New Strategic Partnership between Canada and Mexico

Author:
Perrin Beatty and Andrés Rozental
Publication Date:
11-2012
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Both Canada and Mexico are recovering well from the global economic recession of 2008-2009, but must work harder to make their bilateral relationship work to their mutual benefit. Bilateral trade and investment have grown steadily from very low pre-North American Free Trade Agreement (NAFTA) levels, but there remains enormous, untapped potential, particularly in Mexico. Student, tourist, investor and temporary worker exchanges are enhancing familiarity with each other, but unhelpful stereotypes remain common. New investment and trade opportunities should flow from the new Mexican administration's commitment to open up the energy sector to foreign participation. The assessment and recommendations contained in this special report point to the benefit of efforts that will intensify bilateral partnerships, not only in their own right, but also in strengthening the two countries' ability to deal more effectively with the United States in pursuing matters of mutual concern.
Topic:
Economics, International Trade and Finance, Markets, and Bilateral Relations
Political Geography:
United States, Canada, Latin America, North America, and Mexico

18. This Time Is Not Different: Blaming Short Sellers

Author:
Pierre Siklos
Publication Date:
03-2012
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation
Abstract:
Reinhart and Rogoff's timely volume, This Time Is Different: Eight Centuries of Financial Folly (2009), makes it abundantly clear that financial crises are protracted affairs. The title of this policy brief highlights the irony of lessons never learned. History, in the form of recurring economic crises, does indeed repeat itself. Nevertheless, a closer look at Reinhart and Rogoff's often-publicized conclusion reveals that there are remarkable variations across individual countries' experiences, as well as across time. For example, the actual severity of crises can be exacerbated when a banking crisis is accompanied by a currency crisis. Most importantly, the severity of the recession that typically accompanies all types of financial crises is often determined by the response of policy makers.
Topic:
Economics, International Trade and Finance, Markets, Global Recession, Monetary Policy, and Governance

19. Perspectives on the G20: The Los Cabos Summit and Beyond

Author:
James A. Haley
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The G20 leaders meeting in Los Cabos confront a number of challenges. Most prominent among these is the state of the global economy, which remains dangerously unbalanced, and in which the balance of risks is clearly weighted on the downside. These risks emanate from several sources.
Topic:
Economics, International Cooperation, International Organization, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
China

20. Approaches to Fostering Productivity Growth in Brazil, China and India

Author:
John Whalley, Manmohan Agarwal, and Yao Li
Publication Date:
04-2010
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Productivity growth is a significant contributor to GDP growth, particularly to increases in per capita income. However, there is considerable ambiguity regarding how to measure the concept of technical progress, and consequently on policies that would foster productivity growth. Brazil, China and India, three important emerging economies, are seeking to foster productivity growth through encouraging innovation and technology transfers from the more developed economies. But given the ambiguities about how to encourage innovation and technology transfers, governments in these countries adopted a plethora of policies in the hope that the combination will be effective. This ambiguity can also be seen in the much slower growth of productivity in Brazil than China, even though Brazil has scored higher on the World Bank's Knowledge Assessment Methodology.
Topic:
Development, Emerging Markets, Markets, Science and Technology, and Foreign Direct Investment
Political Geography:
China, India, and Brazil

21. Anatomy of a Fallacy: The Senlis Council and Narcotics in Afghanistan

Author:
Frédéric Grare
Publication Date:
02-2008
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Supplying the majority of the heroin consumed in Europe and nearly all consumed in Russia, Afghanistan's booming illicit drug market has not only entirely distorted the Afghan economy but also corrupted the country's nascent, fragile political system. While current norms regulating the production and traffic of illicit drugs have established the framework of an international prohibition regime, the policies associated with this regime have so far failed to stop or significantly slow the growing of Afghan opium. In 2005, in response to this situation, the Senlis Council, an international drug policy think tank, proposed the creation of a licensing system in Afghanistan which would allow the cultivation of opium for the production of essential medicines such as morphine and codeine. This system is intended to break the vicious circle of the drug economy by moving the opium trade into a legal system controlled by, and benefiting, the state. This paper adopts a critical view of the Senlis proposals, arguing that their underlying principles–economic, social and political–diverge only marginally from those underpinning previous approaches and have little potential for success under current political conditions. The paper concludes that, despite many imperfections, the current policies in place may be optimum given both Afghanistan's present situation and the structural problems inherent in the global war against drugs.
Topic:
Crime, International Law, and Markets
Political Geography:
Afghanistan, Russia, and Europe

22. Great Expectations: Mexico's Short-lived Convergence under NAFTA

Author:
Carol Wise
Publication Date:
01-2007
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Upon Mexico's entry into the North American Free Trade Agreement (NAFTA), neo-classical trade theory assumed, first, that it had the greatest potential for higher rates of growth, productivity and overall welfare gains due to its relatively underdeveloped status; and second, that Mexico's adjustment to an integrated, liberal economy would be the most painful but also the most beneficial. It was envisioned that the blending of Mexico's endowment factors – cheap labour, natural resources, and proximity to the US market – with the abundant capital and advanced technology of Canada and the US would maximize on NAFTA's competitive potential over the long-term. However, these expectations have yet to fully materialize. This paper reviews the convergence/divergence debate with regard to NAFTA and Mexico, and analyzes the empirical data that have been used to tout both the benefits and the costs of asymmetrical integration. In light of the standstill in Mexico's per capita growth since 2001, this paper concludes with a critique of the potential role of NAFTA as a development tool and argues that the steep regional asymmetries call for a more proactive continental strategy.
Topic:
Development, Economics, and Markets
Political Geography:
America, Central America, and Mexico

23. China in the World Trading System

Author:
John Whalley
Publication Date:
10-2005
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper discusses China's trade policy stance following World Trade Organization (WTO) accession in 2002. Three broad issues are considered. The first is the extent to which WTO accession helps China in dealing with various key trade issues, including anti-dumping and the textiles and apparel trade. The second is China's participation in regional trade agreements post WTO accession. The third is the implementability of China's accession commitments in key service areas (banking, insurance, telecoms). The issues now for China are less the merits of WTO accession, and rather its trade policy decisions given WTO membership.
Topic:
Human Rights, International Trade and Finance, and Markets
Political Geography:
China and Asia